A  LEGAL  MINIMUM  WAGE 


BY 


JOHN  O'GRADY,  A.  M. 


A  DISSERTATION 

Submitted  to  the  Faculty  of  Philosophy  of  the  Catholic 

University  of  America  in  Partial  Fulfilment 

of  the  Requirements  for  the  Degree 

of  Doctor  of  Philosophy 


Washington,  D.  C. 
JrNE,  1915 


A  LEGAL  MINIMUM  WAGE 


BY 

JOHN  O'GRADY,  A.  M. 


A  DISSERTATION 

Submitted  to  the  Faculty  of  Philosophy  of  the  Catholic 

University  of  America  in  Partial  Fulfilment 

of  the  Requirements  for  the  Degree 

of  Doctor  of  Philosophy 


Washington,  D.  C. 
June,  1915 


Copyright  1915 

BY 

John  O'grady,  A.  M. 


National  Capital  Press,  Inc. 

Book  Manufacturers 

Washington.  D.  C. 


PREFACE. 

The  present  study  of  minimum  wage  legislation  is  an 
introduction  to  a  larger  study  which  the  writer  intends  to 
make  in  the  near  future.  Anything  like  a  complete  study 
of  minimum  wage  legislation,  at  least  from  the  stand- 
point of  its  positive  economic  effects,  both  direct  and 
indirect,  is  impossible  in  the  present  state  of  our  infor- 
mation. This  is  especially  true  as  regards  the  effects  of 
minimum  wage  legislation  in  England  and  America.  Min- 
imum wage  legislation  is  largely  in  the  experimental  stage 
in  both  countries  as  yet.  It  is  expected  that  the  Report 
of  the  United  States  Bureau  of  Labor  Statistics  on 
minimum  wage  in  Oregon,  which  is  now  in  course  of 
preparation,  will  give  us  precise  data  in  regard  to  the 
economic  effects  of  this  form  of  legislation  in  that  State. 
The  writer  regrets  that  he  could  not  avail  himself  of  the 
excellent  report  on  Minimum  Wage  Legislation  in  the 
United  States  and  Foreign  Countries  which  was  published 
by  the  Bureau  of  Labor  Statistics  as  the  present  work  was 
in  the  press. 

Limited  as  is  our  positive  knowledge  in  regard  to  the 
effects  of  minimum  wage  legislation  a  clear  presentation 
of  such  facts  as  we  have  cannot  but  prove  helpful  to  those 
who  are  interested  in  this  new  social  reform  measure.  If, 
as  the  writer  believes  minimum  wage  legislation  is  a 
useful  remedy  for  the  low  wages  of  women  and  minor 
workers,  much  good  will  be  done  by  educating  the  public 
as  to  its  necessity  and  feasibility.  This  was  the  inspiring 
thought  from  the  beginning  to  the  end  of  this  study. 


305943 


TABLE  OF  CONTENTS 

Preface 3 

Chapter  I:          Introductory 7 

Chapter  II:        Regulation  of  Wages  by  Custom,  Gild,  and 

Statute 10 

Chapter  III :      Compulsory    Arbitration    System    of    New 

Zealand 22 

Chapter  IV:       Wages  Boards  in  Victoria 36 

Chapter  V:         English  Trade  Boards  Act 48 

Chapter  VI :       The  Trade  Boards  Act  in  Operation    ....  57 
Chapter  VII:     The  Coal  Mines  (Minimum  Wage)  Act.    .    .  70 
Chapter  VIII  r  The  Minimum  Wage  Movement  in  America  .  80 
Chapter  IX:      Minimum   Wage   Legislation    in   Massachu- 
setts    88 

Chapter  X:        The  Utah  Minimum  Wage  Law 98 

Chapter  XI :   -/Other  American  Compulsory  Minimum  Wage 

Laws 102 

Chapter  XII:     The  Oregon  Minimum  Wage  Law  before  the 

Courts 107 

Chapter  XIII  ^Some  Objections  to  Minimum  Wage  Legisla- 
tion Considered 116 

Chapter  XIV :  / American  Economists  and  Minimum  Wage 

Legislation 131 

Bibliography 138 


CHAPTER  I 
INTRODUCTORY 

In  America,  as  in  England,  modern  labor  legislation 
began  with  the  protection  of  children  and  women.  These 
were  the  persons  on  whom  the  industrial  system  had 
pressed  most  heavily,  and  hence  they  were  the  first  to 
gain  the  support  of  public  opinion.  As  soon  as  the  evil 
consequences  of  employing  children  and  women  for  ab- 
normally long  hours  and  under  unsanitary  working  con- 
ditions made  themselves  felt  men  realized  that  here  was 
a  condition  which  demanded  remedial  legislation.  The 
State,  it  was  felt,  in  order  to  protect  the  lives  and  safe- 
guard the  health  of  women  and  children,  should  regulate 
their  hours  and  working  conditions.  Most  modern  States 
are  now  convinced  of  their  obligation  in  this  regard  and 
have,  therefore,  passed  laws  regulating  the  hours  and 
working  conditions  of  women  and  children. 

It  is  not  sufficient,  however,  for  women  to  have  their 
hours  of  work  shortened,  or  the  factories  and  stores 
regulated  according  to  the  best  ideas  of  modern  sanita- 
tion; they  must,  also,  receive  sufficient  compensation  so 
that  they  may  be  able  to  purchase  necessary  food  and 
clothing  and  live  in  decent  surroundings.  Recent  investi- 
gations have  disclosed  the  fact  that  a  fairly  large  percent- 
age of  the  women  workers  in  this  country  are  not  re- 
ceiving sufficient  to  maintain  them  even  according  to  the 
lowest  standard  of  decency.  Our  States  are  now  begin- 
ning to  take  cognizance  of  this  evil  and  are  trying  to  apply 
a  remedy  for  it,  just  as  they  did  in  the  case  of  long  hours 
and  lack  of  sanitation  in  factories  and  stores.  Other 
modern  countries,  too,  have  had  to  deal  with  the  evil  of 
low  wages  and  have  tried  many  remedies  for  it.  Of  all 
these  remedies  the  most  direct  and  effective,  so  far  as  our 
present  experience  goes,  is  minimum  wage  legislation.    It 

7 


8  A    ^,1/541.  MINIMUM   WAGE 

is  to  the  consideration  of  this  remedy  for  the  evil  of  low 
wages  that  the  present  study  is  devoted. 

It  is  the  purpose  of  the  writer  to  review  the  modern 
minimum  wage  movement  and  its  results  in  the  different 
countries.  As  an  introduction  to  the  study  of  this  modern 
movement  the  various  methods  of  regulating  wages  in 
vogue  before  the  age  of  free  competition  are  discussed. 
Chapter  II  takes  up  Custom,  Gild  and  Statute  regulations 
of  the  middle  ages.  In  Chapters  III  and  IV  are  dis- 
cussed the  methods  of  regulating  wages  adopted  by  the 
British  Colonies  in  Australasia.  There,  as  will  be  seen, 
two  methods  of  regulating  wages  have  been  applied.  New 
Zealand  has  attempted  to  regulate  wages  by  means  of  a 
court  of  arbitration,  and  Victoria  has  tried  to  do  the 
same  thing  by  means  of  wages-boards  composed  of  an 
equal  number  of  employers  and  employes  together  with 
an  outside  and  non-partisan  chairman.  After  casting 
around  for  years  for  a  remedy  for  the  evil  of  sweating, 
England  determined,  in  1909,  to  apply  the  wages-board 
system  of  Victoria  to  certain  of  her  sweated  industries. 
Chapters  V  and  VI  contain  a  discussion  of  the  application 
of  this  system  and  its  results  in  England.  In  1911,  the 
coal  miners  of  England  and  Wales  began  to  agitate  for  a 
national  minimum  wage,  and  in  the  early  part  of  1912, 
they  went  out  on  strike  in  order  to  enforce  their  demands. 
The  government,  as  will  be  seen  in  Chapter  VII,  instead 
of  granting  the  demands  of  the  miners  for  a  national  min- 
imum wage,  determined  that  the  wages  in  each  district 
should  be  fixed  by  a  district  committee  made  up  of  repre- 
sentatives of  the  miners  and  operators  and  a  chairman 
elected  by  the  representatives  of  both  parties. 

In  Chapter  VIII,  the  minimum  wage  movement  in  the 
United  States  is  discussed.  The  movement  in  this  coun- 
try, as  we  shall  see,  has  been  carried  on  under  the  aus- 
pices of  the  Consumers '  League,  and  has  been  limited  to 
the  securing  of  a  minimum  wage  for  women  and  minors. 
American  students  of  the  question  feel  that  the  time  has 


INTRODUCTORY  9 

not  yet  come  for  the  application  of  minimum  wage  legis- 
lation to  men  in  this  country.  Chapter  IX  contains  a 
discussion  of  the  Massachusetts  minimum  wage  law  which 
was  the  first  to  be  adopted  in  this  country.  In  1913,  eight 
other  American  states  passed  minimum  wage  laws.  These 
laws,  with  the  exception  of  the  Utah  law,  follow  the  main 
lines  laid  down  by  the  Victoria,  British  and  Massachu- 
setts Acts.  In  each  case  the  law  provides  for  a  public 
commission  which  is  authorized  to  establish  a  wage  board 
or  conference  in  each  trade,  made  up  of  an  equal  number 
of  employers  and  employes  together  with  one  or  more 
representatives  of  the  public.  It  is  the  business  of  this 
board  or  conference  to  make  recommendations  to  the  com- 
mission in  regard  to  minimum  rates  of  wages  in  the  par- 
ticular trade  for  which  it  was  established,  which  recom- 
mendations have  the  force  of  law  as  soon  as  they  are  ap- 
proved by  the  commission.  In  Utah,  as  will  be  seen  in 
Chapter  X,  a  different  plan  has  been  adopted.  There  the 
legislature  has  fixed  minimum  rates  of  wages  to  be  paid 
to  all  female  workers  employed  in  any  industry  in  the 
State.  In  six  of  the  eight  States  which  have  adopted  the 
commission  plan  of  fixing  wages,  the  rulings  of  the  com- 
mission are  obligatory,  any  violation  of  them  constitut- 
ing a  misdemeanor.  Chapter  XI  contains  a  comparative 
analysis  of  these  six  compulsory  minimum  wage  laws. 
On  account  of  the  importance  of  the  constitutional  aspect 
of  minimum  wage  legislation,  a  special  chapter,  Chapter 
XII,  is  devoted  to  them.  Chapter  XIII  treats  of  objec- 
tions to  minimum  wage  legislation  and  their  answers. 
This  is  followed  by  another  chapter  which  contains  the 
results  of  a  canvass  of  the  opinions  of  American  econo- 
mists on  minimum  wage  legislation. 


CHAPTER  II 

REGULATION  OF  WAGES  BY  CUSTOM,  GILD  AND 

STATUTE 

Before  the  nineteenth  century  no  country  committed 
itself  unreservedly  to  a  policy  of  free  competition  as  a 
method  of  regulating  wages.  Everywhere,  before  that 
time,  the  laborer 's  income  was  regulated  by  custom,  gild 
statute  or  law.  In  the  early  middle  ages  the  manor  pro- 
vided for  the  wants  of  its  serfs.  These  were  bound  to  the 
soil  and  were  compelled  to  labor  for  the  lord  in  return  for 
either  the  necessaries  of  life  or  the  use  of  land.  The 
amount  which  each  serf  received  was  not  a  matter  of  free 
contract,  but  was  determined  by  custom  and  manorial 
regulations.  In  the  towns  the  income  of  the  workers  was 
determined,  for  a  considerable  part  of  the  population,  by 
the  statutes  of  the  gilds  to  which  they  belonged.  Gild 
statutes  regulated  the  time  of  work,  the  quality  of  the 
article  produced  and  the  remuneration  which  the  mem- 
bers received  for  their  work.  When  the  labor  problem 
became  too  large  for  the  gilds  to  handle ;  when  they  were 
no  longer  able,  or  at  least  willing,  to  regulate  wages  the 
State  felt  that  it  was  its  duty  to  take  over  this  function. 
Accordingly,  in  the  sixteenth  century  we  find  England 
regulating  wages  by  law — a  policy  to  which  it  adhered,  at 
least  in  theory,  until  the  rise  of  the  laissez-faire  doctrine 
in  the  beginning  of  the  nineteenth  century. 

Before  the  Norman  Conquest,  and  for  a  long  time 
afterwards,  the  manor  was  the  great  institution  around 
which  the  economic  life  of  England  centered.  The  lord 
owned  all  the  land  in  the  neighborhood  of  his  manor,  and 
under  him  was  a  body  of  serfs.  The  relation  between  the 
lord  and  his  serfs  was  one  of  mutual  dependence.  He  sup- 
plied the  land  on  which  the  serfs  worked  and  also  in  many 
instances,  the  outfit  necessary  for  the  cultivation  of  the 
land.    The  serfs  in  return  had  certain  obligations  towards 

10 


REGULATION   OF   WAGES   BY   CUSTOM,    GILD   AND   STATUTE       11 

their  lord  which  are  described  for  us  in  more  or  less  detail 
in  Domesday  book.  They  were  bound  to  work  a  certain 
number  of  days  each  week  on  the  lord 's  demesne,  and  an 
additional  number  of  days  in  harvest  time,  and  they  were 
also  bound  to  make  special  payments  in  kind  at  Christ- 
mas, Easter  and  Michaelmas.^ 

In  regard  to  the  exact  number  of  days  which  the  serfs 
were  bound  to  work  for  their  lord,  the  payments  which 
they  were  obliged  to  make,  or  the  incomes  which  they  re- 
ceived, no  general  statement  can  be  made,  for  each  manor 
had  its  own  customs  which  were  handed  down  from  time 
immemorial.  These  customs  determined  the  obligations 
of  the  different  classes  of  serfs  as  well  as  the  return  which 
they  received  for  their  labor. 

A  great  change  took  place  in  the  manorial  system  in 
England  during  the  three  centuries  succeeding  the  Nor- 
man Conquest.  Payment  in  money  was  gradually  sub- 
stituted for  payment  in  kind.  The  serfs  concluded  that 
the  time  devoted  to  the  service  of  their  lord  might  be  bet- 
ter spent  in  the  cultivation  of  the  lands  which  had  been 
allotted  to  them.  The  lords,  on  the  other  hand,  felt  that 
they  could  get  more  out  of  their  tenants  by  money  pay- 
ments than  they  had  been  receiving  in  the  form  of  services 
or  of  kind.  As  a  result  of  the  commutation  of  payments 
in  money  for  payments  in  kind,  the  serfs  were  able  to 
devote  more  attention  to  agriculture. 

When  the  newly  freed  serf  began  to  cultivate  the 
land  more  intensively  he  had  little  time  left  for  the  manu- 
facture of  a  great  many  things  necessary  for  his  daily 
consumption.  A  new  class  of  persons,  therefore,  arose  at 
this  time  who  devoted  either  whole  or  part  of  their  time 
to  the  working  up  of  the  raw  products  of  the  free  tenant 
and  the  preparation  of  the  various  articles  which  he 
needed  in  his  daily  life.  The  members  of  this  class,  at 
first,  were  persons  who  owned  a  piece  of  land  in  town  and 


'Seebohm,  English  Village  Community,  pp.  137  to  148.    Vinogradoff, 
Growth  of  the  Manor,  p.  233. 


12  A   LEGAL  MINIMUM   WAGE 

devoted  part  of  their  time  to  the  cultivation  of  the  land, 
and  the  other  part  to  the  preparation  of  various  articles 
for  the  use  of  others.' 

At  an  early  date  the  town  artisans  were  convinced  of 
the  necessity  of  some  means  of  regulating  work  and  pay 
in  the  various  trades.  Most  of  them  had  been  brought 
up  under  the  influence  of  the  manorial  customs  and  they 
felt  that  new  regulations  ought  to  be  made  to  take  their 
places.  It  was  for  the  purpose  of  making  such  regula- 
tions that  the  first  merchant  gilds  were  established.  These 
organizations  prescribed  the  conditions  under  which  their 
members  worked,  the  quality  of  product  turned  out,  and 
the  price  which  they  were  to  receive  for  their  products. 
The  one  central  purpose  of  all  these  regulations  of  the 
merchant  gilds  was  to  secure  a  sufficient  income  for  their 
members.  With  this  purpose  in  view,  we  can  understand 
why  they  desired  to  see  all  products  come  up  to  a  certain 
standard  and  why  they  prevented  outsiders  from  trading 
in  the  town.  The  gild  member  could  not  expect  to  receive 
a  high  return  if  his  products  did  not  come  up  to  standard. 
Furthermore,  he  felt  that  if  outsiders  were  allowed  to 
compete  freely  with  him  neither  his  standards  of  produc- 
tion nor  his  income  could  be  maintained  at  a  very  high 
level. 

As  the  population  of  the  town  continued  to  increase, 
owing  to  the  great  number  of  free  serfs  coming  in  from 
the  country  every  year,  there  arose  a  new  class  of  men 
who  owned  no  property  in  the  town  but  who  desired  to 
make  their  living  by  some  handicraft.  If  the  merchant 
gild  allowed  all  the  members  of  this  class  to  enter  the  var- 
ious trades  without  any  restriction  whatsoever,  they 
could  not  keep  up  the  quality  of  their  wares  or  the  income 
of  their  members.  Hence  they  were  driven  in  self-de- 
fense to  draw  up  rather  strict  rules  so  as  to  limit  the 
number  of  persons  entering  each  trade.    As  the  number 


'Cunningham,  History  of  English  Industry  and  Commerce,  vol.-  II, 
p.  95.  Biicher,  Industrial  Evolution,  p.  192. 


REGULATION   OF   WAGES   BY   CUSTOM,    GILD   AND   STATUTE       13 

of  those  excluded  increased,  radical  feeling  against  the 
organization  grew  apace.  This  feeling  soon  became  crys- 
tallized and  found  expression  in  the  form  of  new  organi- 
zations known  as  craft  gilds.  Unlike  the  old  merchant  gild, 
the  craft  gild  did  not  attempt  to  embrace  all  the  inhabi- 
tants of  the  town,  but  merely  those  of  a  particular  trade. 
The  regulations  of  the  craft  gild  were  essentially  the  same 
as  those  of  the  merchant  gilds.  Strangers  were  forbidden 
to  trade  in  the  town  controlled  by  these  organizations,  ex- 
cept on  market  days,  and  even  then  they  were  forbidden 
to  sell  anything  except  victuals.  The  articles  produced 
by  every  craftsman  had  to  reach  a  certain  standard  of 
perfection,  and  hence  each  one  had  to  pass  several  years' 
apprenticeship,  after  which  he  was  compelled  to  take  a 
rather  difficult  examination  before  being  admitted  to  the 
trade.  The  time  during  which  the  craftsman  should 
work,  the  kind  of  product  he  should  turn  out  and  the  price 
of  his  product  were  all  regulated  by  gild  statute.  As  in 
the  case  of  the  merchant  gild,  the  principal  purpose  of 
these  regulations  was  to  enable  each  craftsman  to  earn 
his  livelihood  by  the  exercise  of  his  own  trade.^ 

Like  the  merchant  gilds,  the  craft  gilds  in  time  also  be- 
came too  restrictive.  Their  apprenticeship  regulations 
became  more  and  more  exacting  as  the  number  of  appli- 
cants for  admission  to  the  trades  increased.  This  exclu- 
siveness  of  the  craft  gilds  gave  rise  to  much  bitter  feeling 
against  them  about  the  middle  of  the  fourteenth  century.* 
There  were  a  great  many  persons  at  that  time  who  could 
never  hope  to  become  apprentices  to  any  trade  and  who, 
even  after  they  had  learned  a  trade,  had  little  chance  of 
becoming  masters.^  Common  interests  soon  developed  a 
common  consciousness  of  rights  among  those  who  were 
thus  excluded.     The  plague  of  1348  gave  this  class  of 


•See  Articles  of  the  London  Spinners'  Gild,  quoted  in  Robinson's 
Readings  in  European  History,  pp.  609-610. 

*Brentano'8  Introductory  Essay  on  Smiths'  Gilds. 

•Ashley,  Introduction  to  English  Economic  History  and  Theory,  part 
II,  p.  106. 


14  A   LEGAL  MINIMUM   WAGE 

persons  a  splendid  opportunity  of  asserting  themselves. 
They  took  advantage  of  the  scarcity  of  labor  to  demand 
an  increase  of  wages.  The  employers  resisted  the  de- 
mands of  their  journeymen  and  had  a  law  passed  known 
as  the  Statute  of  Laborers,  by  which  it  was  ordained  that 
no  workman  should  receive  more  and  no  employer  should 
give  more  than  had  been  customary  before  the  plague. 
By  the  middle  of  the  fourteenth  century  the  gilds  no 
longer  regulated  the  wage  of  a  large  body  of  workers. 
The  labor  problem  was  becoming  too  large  for  the  craft 
organizations,  and  the  more  the  number  of  laborers  in- 
creased, the  more  powerless  the  old  organizations  became 
to  regulate  wages  and  working  conditions.  Through  the 
Statute  of  Laborers  the  master  craftsmen  and  feudal 
lords  tried  to  retain  control  over  the  newly  freed  serfs  and 
to  prevent  their  wages  from  increasing.  That  they  were 
unsuccessful  in  their  attempt  is  evident  from  the  great 
increase  of  wages  after  the  black  death,  generally  reck- 
oned at  from  50  to  100  per  cent.,  and  from  the  persistent 
complaints  in  Parliament  on  the  necessity  of  further  leg- 
islation for  the  purpose  of  keeping  down  wages." 

Towards  the  end  of  the  fourteenth  century  the  labor- 
ers, whose  interests  were  no  longer  promoted  by  the  gilds 
and  who  had  abandoned  all  hope  of  obtaining  protection 
from  Parliament,  formed  organizations  of  their  own 
which  are  known  as  journeymen's  organizations.  These 
organizations  reached  the  zenith  of  their  power  about 
the  middle  of  the  fifteenth  century.  From  that  time  on 
they  began  to  show  signs  of  disintegration  until  they 
were  finally  brought  under  the  control  of  the  older  organ- 
izations at  the  beginning  of  the  sixteenth  century. 
Throughout  the  sixteenth  and  seventeenth  centuries  the 
journeymen's  organizations  continued  as  mere  adjuncts 
of  the  old  craft  gilds,  which  at  that  time  had  become  in  a 
great  measure,  trading  companies.  Under  such  circum- 
stances the  journeymen's  organizations  could  be  of  little 

•Putnam  Enforcement  of  the  Statute  of  Laborers,  pp.  4-6. 


REGULATION   OF   WAGES   BY   CUSTOM,    GILD   AND   STATUTE    15 

use  to  their  members.  They  could  not  be  used  as  a  means 
of  defending  the  rights  and  advancing  the  interests  of  the 
journeymen  as  a  whole. 

The  weakness  of  the  journejonen's  organizations  dur- 
ing all  this  period  was  due  in  part  to  the  dominance  of  the 
trading  companies  and  partly  to  the  fact  that  no  journey- 
man expected  to  continue  for  his  whole  life  as  such.  All 
the  journejnmen  hoped  to  become  small  masters  and  the 
hope  was  continually  realized  by  the  more  ambitious  and 
energetic.  In  this  way  the  journeymen  were  always  los- 
ing their  best  members.  Once  they  had  left  the  ranks  of 
the  journeymen  to  become  small  masters,  they  came  under 
the  sway  of  the  trading  organizations.  The  trading  or- 
ganizations in  those  days  helped  the  small  master  to  mar- 
ket his  product  and  they  not  unfrequently  provided  him 
with  raw  material  and  the  tools  necessary  in  his  trade. 
The  fact  that  the  trader  assumed  the  responsibility  of 
marketing  the  goods  of  the  small  master  seems  to  have 
given  him  considerable  control  over  the  latter.  The 
trader  seems  to  have  acquired  the  power  in  one  way  or 
another  of  dictating  the  terms  under  which  the  small 
master  was  to  carry  on  his  work  as  well  as  the  kind  of 
material  he  was  to  use.^ 

On  account  of  the  great  power  of  the  trading  com- 
panies, in  the  sixteenth  and  seventeenth  centuries  as  well 
as  the  opportunities  that  were  being  held  out  to  their 
more  ambitious  members,  it  was  very  difficult  for  the 
journeymen  to  form  strong  organizations  of  their  own. 
From  the  beginning  of  the  sixteenth  century  onwards,  we, 
therefore,  find  a  large  number  of  persons  who  could  not 
rely  on  any  organization  for  protection.  The  enclosures 
of  that  century  as  well  as  the  confiscation  of  the  monas 
teries  added  considerably  to  this  number.  With  no  or- 
ganization or  manorial  laws  to  protect  them,  the  laborers 
were  left  to  the  mercy  of  the  large  land  owner,  or  trading 


'Ashley,    Introduction   to   English    Economic   History   and   Theory, 
Part  II,  p.  .114. 


16  A   LEGAL  MINIMUM   WAGE 

capitalist.  The  great  monetary  revolution  of  the  six- 
teenth century,  as  well  as  the  increasing  supply  of  labor, 
pulled  down  the  wages  of  the  laborer  and  reduced  him  to 
a  condition  of  poverty.  A  paternalistic  government  be- 
held the  laborer  who  had  formerly  been  protected  by  gild 
statute,  now  abandoned  and  left  a  prey  to  the  economic 
forces  of  the  time.  A  government  which  considered  it  its 
duty  to  provide  a  remedy  for  all  the  evils  of  life,  could 
not  pass  over  this  great  evil  without  trying  to  provide  a 
remedy  for  it.  It,  therefore,  determined  to  provide  a 
remedy  for  low  wages  and  its  remedy  was  embodied  in  the 
famous  statute  of  artificers  passed  in  1562. 

The  principal  object  of  the  statute  of  artificers  was  to 
better  the  condition  of  the  laborer  by  securing  for  him  in 
time  of  plenty  and  in  time  of  scarcity  a  * '  convenient  por- 
tion of  wages."  Every  year  the  justices  in  each  locality 
and  each  corporate  town  were  to  meet,  and  calling  to  them 
such  discreet  and  grave  persons  as  they  should  think 
meet,  and  confirming  together  respecting  the  plenty  and 
scarcity  of  the  time  and  other  circumstances  necessary  to 
be  considered,  should  limit  and  appoint  wages  for  every 
kind  of  manual  labor,  skilled  or  unskilled,  by  the  year, 
week  or  day,  and  with  or  without  allowances  for  food." 
No  artisan  was  allowed  to  exercise  any  craft  without  a 
7-year  apprenticeship.  Every  master  in  the  town  who 
employed  one  journeyman  might  take  three  appen- 
tices.    The  hours  of  labor  were  also  fixed  by  the  statute. 


•It  may  be  interesting  for  students  of  the  modern  minimum  wage 
movement  to  note  the  method  of  procedure  followed  in  the  administra- 
tion of  the  statute  of  artificers.  The  justices  of  the  peace  were  to 
meet  within  six  weeks  after  Easter,  and  fix  the  wages  of  all  laborers. 
After  having  fixed  the  rates  the  justices  were  to  send  them  to  the 
Court  of  Chancery  for  approval,  whereupon  the  Lord  Chancellor  with 
the  approval  of  the  privy  council  was  to  send  twelve  sealed  copies  to 
the  sheriff  and  justices  of  the  peace  in  each  county,  as  well  as  to  the 
mayor  of  each  city.  These  oflBcers  were  to  have  the  decrees  of  the 
justices  proclaimed  on  each  market-day,  In  all  the  corporate  towns, 
before  Michaelmas.  The  justices  of  the  peace  and  the  mayors  of  towns 
were  authorized  to  make  special  inquiries  from  time  to  time  to  see  that 
the  rates  fixed  by  the  justices  were  being  paid.  Persons  paying  more  or 
less  than  the  prescribed  wage  were  to  be  fined  five  pounds  or  to  spend 
ten  days  in  prison. 


REGUL.\TION   OF   WAGES   BY   CUSTOM,    GILD   AND    STATUTE       17 

No  artisan  was  allowed  to  work  more  than  twelve  hours 
in  summer,  and  from  dark  until  dark  in  winter.  In  all  the 
principal  employments,  artisans  were  to  be  hired  by  the 
year  and  were  not  to  leave  their  masters  or  to  be  dis- 
missed by  them  before  the  end  of  the  year.** 

That  the  statute  of  artificers  was  not  enforced  in  any 
general  and  systematic  manner  seems  to  be  the  general 
opinion  of  writers.  Mr.  Hewens,  after  a  long  and  pains- 
taking investigation,  was  able  to  discover  only  forty-seven 
cases  of  assessments  of  wages  between  1563  and  the  end 
of  the  eighteenth  century.  These  cases  were  scattered  un- 
evenly over  this  long  period,  whence  he  concluded  that 
sometimes  the  justices  were  very  active  in  enforcing  the 
statute,  while  at  other  times  there  was  little  or  no  enforce- 
ment. As  a  result  of  a  more  recent  investigation,^^  Miss 
Ellen  A.  McArthur  concluded  that  the  statute  was  admin- 
istered in  a  systematic  way  in  London  up  to  the  beginning 
of  the  seventeenth  century,  from  which  she  tries  to  estab- 
lish a  probability  in  favor  of  its  systematic  enforcement 
in  other  districts. ^^  Even  though  we  admit  the  force  of 
this  contention,  it  only  brings  us,  at  most,  to  the  begin- 
ning of  the  seventeenth  century,  after  which  we  have 
little  evidence  to  show  that  the  statute  was  generally  en- 
forced. If  the  justices  had  done  their  duty  in  putting 
into  effect  the  provisions  of  the  Elizabethan  statute  it  is 
difficult  to  understand  why  wages  should  have  continued 
to  fall  and  the  laborer  to  be  reduced   to  a  condition   of 


"The  statute  of  artificers  purports  to  be  merely  a  codification  of  all 
labor  laws  passed  since  the  time  of  Edward  I.  In  reality,  however,  it 
attempts  more  than  any  previous  statutes.  There  is  no  department  of 
the  labor  contract  which  it  does  not  attempt  to  regulate.  The  justices 
might  force  persons  to  accept  apprenticeship  in  certain  trades  whether 
these  were  willing  or  not,  they  might  compel  artificers  from  the  towns 
to  engage  in  agricultural  labor  in  harvest  time,  they  might  compel  an 
employe  to  remain  with  his  employer  until  the  time  of  his  service  was 
completed.  The  statute  prescribed  that  no  person  should  retain  any 
employes  in  his  or  her  service  for  less  than  one  year,  and  also  prescribed 
the  kind  of  persons  who  might  be  compelled  to  serve  in  each  craft. 

'"Regulation  of  Wages  by  the  Justices  of  the  Peace,  Economic  Jour- 
nal, vol.  8,  pp.  341-346. 

"English  Historical  Review,  vol.  15,  pp.  445-455. 


18  A   LEGAL  MINIMUM   WAGE 

poverty  throughout  the  seventeenth  and  the  greater  part 
of  the  eighteenth  century. 

All  through  the  seventeenth  century  the  ordinary 
laborers  were  unable  to  form  any  effective  organization 
for  the  defense  of  their  own  interests  and  to  secure  the  en- 
forcement of  the  laws  which  had  ostensibly  been  passed 
for  their  benefit.  But,  as  the  difficulties  of  becoming  an 
independent  master  were  augmented  and  as  the  modern 
gulf  between  capital  and  labor  began  to  appear,  the 
workers  developed  a  common  consciousness  with  regard 
to  their  rights.  The  first  time  of  which  we  have  record 
that  this  common  consciousness  began  to  show  itself  in  the 
form  of  united  and  independent  action  was  in  1720.  At 
that  time  we  find  the  master  tailors  complaining  to  Parlia- 
ment that  the  journeymen  tailors,  in  and  about  the  cities 
of  London  and  Westminster,  had  lately  entered  into  a 
combination  to  raise  wages. ^^  Parliament,  thereupon 
passed  a  law  regulating  the  hours  and  wages  of  journey- 
men, and  at  the  same  time  declaring  that  all  combina- 
tions among  them  for  the  purpose  of  raising  wages  or 
lessening  hours  were  null  and  void  and  subjecting  persons 
entering  into  such  agreements  to  two  months'  imprison- 
ment. By  this  time  the  statute  of  artificers  had  practi- 
cally fallen  into  disuse,  the  magistrates  had  practically 
ceased  to  enforce  it. 

The  purpose  which  the  laborers  had  in  view  in  uniting 
in  1720,  and  throughout  the  whole  course  of  the  eighteenth 
century  was  to  compel  the  magistrates  to  enforce  the  old 
statute  or  to  induce  Parliament  to  pass  new  legislation 
where  the  existing  statutes  did  not  apply.  Several  times 
during  the  eighteenth  century  and  the  beginning  of  the 
nineteenth  Parliament  in  response  to  the  demands  of  the 
laborers  passed  new  statutes  regulating  wages  or  issued 
orders  to  the  magistrates  to  enforce  the  statute  of  ar- 
tificers. In  1720,  as  was  already  noted,  Parliament 
passed  a  statute  regulating  the  hours  and  wages  of  jour- 

"Webb,  History  of  Trade  Unionism,  p.  27. 


REGULATION   OF   WAGES   BY   CUSTOM,    GILD   AND    STATUTE       19 

neymen  tailors  and  in  1756,  it  passed  a  similar  statute 
regulating  hours  and  wages  in  the  woolen  trades.  In 
1776,  the  Spitfield  silk  weavers  protested  that  they  were 
without  employment  owing  to  the  importation  of  silk. 
Parliament,  therefore,  passed  a  law  against  the  importa- 
tion of  silk  and  empowered  justices  to  regulate  the  hours 
and  wages  of  the  weavers.  This  combination  of  the 
weavers  to  obtain  the  passage  of  the  law  became  a  perma- 
nent union  to  enforce  it.  It  continued  to  represent  the 
weavers  before  the  justices  and  helped  to  draw  up  those 
elaborate  schedules  on  which  piece  rates  were  based.^'^ 
Between  1793  and  1815,  the  cotton  operatives  made  num- 
erous petitions  to  Parliament  for  a  minimum  wage.  In 
the  first  years  of  the  nineteenth  century,  petition  after 
petition  was  sent  into  Parliament  from  Lancashire  and 
Glasgow  reiterating  the  old  demand  for  a  legally  fixed 
scale  of  wages.  In  1808,  the  hand  loom  weavers  whose 
wages  were  a  little  more  than  a  third  of  what  they  had 
been  ten  years  before,  petitioned  Parliament  for  a  legal 
minimum  wage.  A  select  committee  was  appointed  to 
consider  the  matter.  This  committee  made  an  unfavor- 
able report  on  the  petition  of  the  hand  loomers  on  the 
ground  that  the  fixing  of  a  minimum  rate  of  wages  was 
wholly  inadmissable  in  principle,  that  it  was  incapable  of 
being  reduced  to  practice  and  that  it  would  be  most  detri- 
mental to  the  interests  of  employer  and  employe." 

This  report  marks  the  beginning  of  a  great  change  in 
the  economic  policies  of  Parliament.  English  statesmen 
were  now  beginning  to  feel  the  influence  of  the  philosophy 
of  Adam  Smith ;  they  were  beginning  to  feel  that  a  legal 
regulation  of  wages  was  a  great  handicap  to  industry. 
The  dominant  classes  seized  on  this  new  theory  as  the 
best  means  of  advancing  their  own  interests.  For  several 
years  they  had  successfully  opposed  the  enactment  or  en- 
forcement of  laws  destined  to  improve  the  condition  of 

"Webb,  History  of  Trade  Unionism,  p.  42. 
"Webb.  op.  cit.,  p.  99. 


20  A   LEGAL  MINIMUM   WAGE 

the  laborer.  The  rise  of  the  new  philosophy  made  their 
case  much  stronger.  For  the  future  they  undertook  to 
oppose  all  such  laws  in  the  name  of  economic  science. 

The  workmen  were  now  striving  by  every  means  in 
their  power,  against  the  adverse  bias  of  the  justices  of 
the  peace,  of  the  courts  and  of  Parliament,  to  secure  the 
enforcement  of  the  statute  of  artificers.  The  cotton 
weavers  of  Glasgow,  after  having  unsuccessfully  peti- 
tioned Parliament  for  four  years  to  enforce  the  statute, 
determined  to  take  out  legal  proceedings  against  their 
employer s.^^  The  court  upheld  the  power  of  the  magis- 
trates to  fix  wages.  The  magistrates  thereupon  set  about 
drawing  up  schedules  of  wages  for  the  trade  but  after  the 
schedules  had  been  drawn  up,  they  refused  to  grant  an 
order  for  their  enforcement.  The  result  was  a  long  and 
bitter  strike  in  which  the  operatives  were  worsted.'^ 
About  the  same  time  a  number  of  other  labor  organiza- 
tions, among  them  the  London  artisans  and  the  Kentish 
millers,  also  appealed  to  the  courts  in  order  to  force  the 
justices  to  fix  wages  in  their  trades  but  their  appeals  were 
just  as  fruitless  as  were  those  of  the  Glasgow  weavers. 
As  a  last  resort  the  labor  organizations  petitioned  Parlia- 
ment to  enforce  the  old  statutes  but  instead  of  granting 
their  petition,  Parliament  passed  an  act  in  1813  repeal- 
ing that  section  of  the  statute  of  artificers  which  em- 
powered the  justices  to  regulate  wages.  This  act  marked 
the  final  doom  of  the  old  doctrine  of  a  legal  wage  and  it 
was  one  of  the  first  great  victories  of  the  advocates  of 
laissez-faire. 

All  through  the  nineteenth  century  England  followed 
a  strict  laissez-faire  policy  in  regard  to  the  wages.  She 
looked  upon  wages  as  a  matter  to  be  determined  between 
employers  and  employes  without  any  outside  interfer- 
ence. During  the  first  few  years  of  the  twentieth  century, 
however,  there  has  been  a  considerable  reaction  against 


^"Webb,  op.  cit.,  p.  57. 

"Webb,  History  of  Trade  Unionism,  p.  57. 


REGULATION   OF  WAGES   BY   CUSTOM,    GILD   AND   STATUTE      21 

this  policy.  England  again  realized  that  it  was  the  busi- 
ness of  the  State  to  take  cognizance  of  the  evil  of  low 
wages.  In  casting  about  for  a  remedy  she  was  attracted 
by  the  example  of  her  daughter  colonies  in  Australia  and 
New  Zealand  which,  for  some  years  before  had  been  regu- 
lating wages  by  law.  After  examining  the  experiences 
of  her  colonies  with  this  remedy,  England  concluded  that 
it  offered  the  most  direct  and  effective  solution  for  the 
problem  of  low  wages  which  human  experience  had  so 
far  devised  and  hence  it  was  that  she  determined,  in 
1909,  to  revert  once  more  to  the  policy  of  legal  regula- 
tion of  wages  in  certain  of  her  sweated  trades. 


CHAPTER  III 

COMPULSORY  ARBITRATION  SYSTEM  OF  NEW 

ZEALAND 

The  first  attempt  at  complete  and  wholesale  regulation 
of  the  labor  contract  in  recent  times  was  made  by  the 
British  colonies  in  Australasia.  Other  modern  countries, 
for  the  most  part,  have  satisfied  themselves  with  regulat- 
ing hours  and  working  conditions,  and  they  have  been 
very  slow  to  fix  the  amount  of  the  laborer's  remunera- 
tion. Australia  and  New  Zealand  not  only  attempt  to 
regulate  by  law  hours  and  working  conditions,  but  also 
the  amount  to  be  paid  to  the  laborer  for  his  work.  Legis- 
lation in  this  matter  in  the  colonies  has  developed  along 
two  different  lines.  The  Australasian  colonies  were  anx- 
ious to  put  an  end  to  industrial  disputes  and  for  this  pur- 
pose established  courts  of  conciliation  and  compulsory 
arbitration.  They  desired  to  see  an  end  of  sweating 
and  so  established  a  system  of  wages  boards.  These 
systems  were  inspired  by  different  sets  of  circumstances, 
and  seemed,  at  first,  to  have  been  created  for  distinct  pur- 
poses, yet  if  we  follow  them  in  the  process  of  their  devel- 
opment and  application  we  shall  find  that  they  are,  in  last 
analysis,  the  same,  for  both  commit  the  State  to  the  policy 
of  complete  regulation  of  the  labor  contract. 

For  nearly  half  a  century  before  this  time,  the  Euro- 
pean countries  had  been  trying  to  grapple  with  industrial 
disputes  and  sweating.  For  the  purpose  of  composing 
industrial  disputes,  England  had  established  her  coun- 
cils of  conciliation  in  1866,  which  were  again  modified  by 
the  legislation  of  1872.  France  had  her  councils  of  con- 
ciliation which  were  established  for  the  same  purpose. 
Many  of  our  American  States  had,  also,  made  provisions 
for  the  settling  of  industrial  disputes.  But  in  England, 
France  and  the  United  States,  the  State  was  satisfied  with 
intervening  for  the  purpose  of  bringing  employers  and 

22 


COMPULSORY   ARBITRATION   SYSTEM   OF   NEW   ZEALAND  23 

employes  together.  Once  the  employers  and  employes 
had  been  brought  together,  they  were  to  be  urged  to  select 
their  own  representatives  on  the  conciliation  boards,  and 
their  representatives  were  to  elect  an  outside  chairman 
who  was  to  act  as  an  impartial  umpire  between  the  two 
contending  parties.  This  was  as  far  as  any  European 
country  had  gone  in  the  settlement  of  industrial  disputes 
when  the  Australasian  colonies  established  their  system 
of  compulsory  arbitration.  Similarly,  in  regard  to  sweat- 
ing, all  modern  countries  had  been  satisfied  with  the  in- 
direct remedies  for  it,  such  as  the  compulsory  registra- 
tion of  outworkers  and  the  improvement  of  the  sanitary 
conditions  of  their  homes.  Not  one  of  them  went  so  far 
as  to  strike  at  the  very  root  of  the  evil  of  sweating  by 
increasing  the  wages  of  the  sweated  workers.  It  remained 
for  Australia  and  New  Zealand  to  pave  the  way  for  the 
other  countries  in  the  solution  of  this  important  problem. 

When  the  Australasian  colonies  first  adopted  a  system 
of  compulsory  arbitration  it  was  not  thought  that  the 
courts  would  have  to  pass  on  so  many  things  connected 
with  the  labor  contract.  The  originators  of  the  system 
believed  that  there  was  some  kind  of  custom  determining 
wages  and  other  things  connected  with  the  labor  contract, 
and  that  the  only  thing  which  the  courts  would  have  to  do 
would  be  to  discover  and  interpret  this  custom.  Simi- 
larly, when  the  wages  board  system  was  adopted,  its 
framers  merely  thought  at  first  of  applying  it  to  remedy 
conditions  in  certain  sweated  trades.  Never  for  a  mo- 
ment did  they  think  of  its  taking  the  place  of  collective 
bargaining  in  all  matters  pertaining  to  the  labor  contract. 
But  their  hopes  and  expectations  were  even  more  disap- 
pointed here  than  in  the  case  of  compulsory  arbitration. 

The  first  Industrial  Conciliation  and  Arbitration  Act 
in  Australasia  was  passed  by  New  Zealand  in  1894.  That 
colony  had  experienced  a  period  of  industrial  depression 
in  the  80 's.  About  1890  there  was  considerable  agitation 
concerning  the  evil  of  sweating,  which  was  supposed  to 


524  A   LEGAL  MINIMUM   WAGE 

exist  in  some  cities  in  the  colony.  A  commission  was, 
therefore,  appointed  to  investigate  this  evil,  but  it  discov- 
ered that  the  rumors  about  sweating  in  New  Zealand  were 
unfounded.  However,  to  make  provision  against  its  pos- 
sible development  in  the  future,  the  commission  advised 
the  creation  of  boards  of  conciliation  and  arbitration 
based  upon  equal  representation  of  employers  and  em- 
ployes. In  the  year  in  which  the  commission  made  its 
report  the  great  maritime  strike  broke  out  in  Australia 
as  a  result  of  the  demand  of  the  seamen  for  increased 
wages  which  had  been  flatly  refused  by  the  shipowners. 
The  strike  soon  spread  to  New  Zealand.  The  seamen's 
union  there  called  out  all  the  men  working  on  board  the 
ships  of  the  Union  Steamship  Company,  alleging  as  their 
reason  the  fact  that  the  owners  belonged  to  the  ship- 
owners' association  which  had  been  recently  formed  in 
Australia  and  which  was  carrying  on  the  fight  against  the 
seamen  of  that  country.  Another  reason  alleged  by  the 
seamen's  union  for  its  action  was  the  fact  that  the  Union 
Steamship  Company  was  beginning  to  man  its  steamships 
with  non-union  men.  After  lasting  for  a  period  of  three 
months  the  strike  ended  in  a  victory  for  the  employers 
and  an  almost  total  demoralization  of  the  union.^^ 

Soon  after  the  great  maritime  strike  the  New  Zealand 
unions  entered  the  field  of  politics  with  the  hope  of  ob- 
taining by  law  what  they  had  been  unable  to  obtain  by 
collective  bargaining.  In  the  next  election  they  threw 
all  their  support  to  the  Liberals  who  were  thereby  re- 
turned to  power.  In  order  to  fulfill  its  pledges  to  the 
labor  element  of  the  country,  and  to  satisfy  the  general 
demand  for  some  measure  for  the  prevention  of  indus- 
trial disputes,  the  newly-elected  Liberal  Party  introduced 
a  compulsory  conciliation  and  arbitration  bill  into  Parlia- 
ment in  1892,  but,  owing  to  the  opposition  of  the  upper 
house,  it  did  not  succeed  in  becoming  law  until  1894. 


"Broadhead,  State  Regulation  of  Labor  and  of  Labor  Disputes  in 
New  Zealand,  p.  4. 


COMPULSORY   ARBITRATION   SYSTEM   OF   NEW   ZEALAND  25 

The  purpose  of  the  Industrial  Conciliation  and  Arbi- 
tration Act  passed  by  the  New  Zealand  Parliament  in 
1894,  according  to  its  author,  Mr.  Reeves,  was  to  prevent 
the  recurrence  of  industrial  disputes  and  to  provide  a 
remedy  for  the  evil  of  sweating.  But  neither  Mr.  Reeves 
nor  the  other  members  of  Parliament  realized  what  a 
great  task  the  State  was  taking  upon  itself  in  trying  to 
cope  with  these  two  industrial  phenomena.  Parliament 
is  described  as  only  mildly  interested  in  the  measure, 
scarcely  half  the  members  attending  the  debates  upon  it 
during  the  session.  Mr.  Reeves  did  not  realize  how  far 
he  was  carrying  the  principle  of  State  intervention  in  the 
labor  contract.  He  thought  that  ninety-nine  out  of  a  hun- 
dred of  the  industrial  disputes  would  be  settled  by 
conciliation. 

The  machinery  of  the  Industrial  Conciliation  and  Ar- 
bitration Act  consisted  of  one  court  for  the  whole  colony, 
and  a  board  of  conciliation  in  each  of  the  eight  industrial 
districts  into  which  the  colony  was  divided.  The  arbi- 
tration court  consisted  of  one  judge  from  the  supreme 
bench  appointed  by  the  governor,  and  two  assessors  ap- 
pointed on  the  recommendation  of  the  industrial  unions 
of  employers  and  of  employes.  The  boards  of  concilia- 
tion in  each  district  consisted  of  five  members,  two  elected 
by  industrial  unions  of  employers,  two  by  industrial 
unions  of  employes,  and  one  outside  chairman  elected  by 
the  representatives  of  both  parties. 

Under  the  New  Zealand  act  only  industrial  unions  or 
associations  of  employers  or  employes  can  initiate  pro- 
ceedings before  the  court  in  cases  of  industrial  disputes. 
An  individual  employer  or  employe  may,  however,  be 
summoned  before  the  court  for  violation  of  its  decrees." 
The  law  itself  makes  provision  for  the  formation  of  in- 
dustrial unions  or  associations.  Any  three  bona  fide 
employers  or  fifteen  employes  may  form  a  union  or  asso- 

■'Clark,  The  Labor  Movement  in  Australasia,  p.  160. 


«b  A   LEGAL  MINIMUM   WAGE 

ciation.  All  that  is  necessary  is  that  they  make  an  appli- 
cation for  registration  and  that  this  application  be  accom- 
panied by  a  list  of  the  members  and  officers  of  the  union, 
and  a  copy  of  the  resolution  in  favor  of  registration 
passed  by  a  majority  of  the  members  in  a  meeting  spe- 
cially called  for  that  purpose.  Registration  makes  the 
union  or  association  a  legally  incorporated  body  having 
all  the  rights  and  obligations  of  such  bodies.  It  may  be 
sued  or  sue  in  its  own  name;  it  may  appear  before  the 
court  or  board  as  one  of  the  parties  to  an  industrial  dis- 
pute.^^  When  the  court  gives  a  decision,  or  an  industrial 
agreement  is  entered  into  before  a  board,  it  becomes  bind- 
ing on  the  industrial  unions  of  employers  and  of  em- 
ployes, both  individually  and  collectively,  in  the  particu- 
lar trade  to  which  it  applies.  Unions  may,  at  any  time, 
cancel  their  registration  on  making  application  to  the 
court  registrar  who  gives  a  six  months '  notice  of  the  can- 
cellation of  registration.  The  cancellation  of  registra- 
tion, however,  does  not  free  the  members  from  the  obli- 
gation of  an  industrial  agreement  or  award  until  the  per- 
iod for  which  such  an  award  or  agreement  has  been  made 
comes  to  an  end.^° 

According  to  the  Industrial  Conciliation  and  Arbitra- 
tion Act  of  1894,  industrial  disputes  had,  at  first,  to  be 
referred  to  the  Board  of  Conciliation  in  the  district  in 
which  they  arose.  If  the  Board  succeeded  in  inducing 
the  parties  to  come  to  an  agreement,  the  agreement  was 
filed  with  the  clerk  of  awards,  and,  thereby,  became  bind- 
ing on  both  parties.  If  the  Board  did  not  succeed  in 
bringing  about  an  agreement,  it  was  to  file  a  recommen- 
dation which  was  to  acquire  the  force  of  a  law  inside  of 
one  month  unless  either  party  in  the  meantime  filed  an 
objection.     When  an  objection  to  the  recommendation 


"Industrial  Conciliation  and  Arbitration  Act  of  1908,  sees.  5,  6,  7,  8 
and  9. 

'"Industrial  Conciliation  and  Arbitration  Act  of  1908,  sees.  21  and  22. 


COMPLUSORY   ARBITRATION   SYSTEM   OF   NEW   ZEALAND  27 

was  filed,  the  dispute  was  to  be  taken  before  the  Indus- 
trial Arbitration  Court." 

Out  of  a  total  of  206  cases  brought  before  the  boards 
of  conciliation,  between  the  time  of  the  law's  coming  into 
operation  and  December  31,  1901,  only  fifty-four  were 
completeh^  settled  by  them;  two  were  partly  settled; 
eight  cases  were  withdrawn  and  145  cases  were  appealed 
to  the  court.  Owing  to  the  acknowledged  failure  of  the 
boards  of  conciliation  to  bring  about  agreements  be- 
tween the  employers  and  employes,  Parliament  concluded 
that  it  was  useless  to  force  the  parties  to  carry  their 
disputes  before  them.  In  1901,  therefore,  the  law  was 
so  amended  as  to  enable  the  unions  to  take  their  disputes 
directly  to  the  court.  Between  that  time  and  1908,  the 
boards  of  conciliation  played  a  very  small  part  in  the 
settling  of  industrial  disputes  or  the  regulation  of  wages 
in  InIcw  Zealand.  The  reason  commonly  alleged  for  the 
failure  of  the  boards  was  their  incompetency.  As  a  gen- 
eral rule,  they  were  composed  of  men  who  had  no  practi- 
cal knowledge  of  the  business  which  they  were  trying  to 
regulate.  For  this  reason,  it  is  said,  employers  lost  all 
confidence  in  them. 

Between  1894  and  1908,  the  greater  part  of  the  indus- 
trial disputes  of  New  Zealand  were  settled  by  court  deci- 
sions. As  the  number  of  these  industrial  disputes  in- 
creased and  the  questions  coming  under  the  court's  juris- 
diction multiplied,  the  court  naturally  became  overbur- 
dened with  work.  It  was,  therefore,  evident  that  oven  in 
a  small  country  like  New  Zealand,  with  a  population  of 
about  one  million,  a  single  court,  even  with  all  the  aids 
which  the  law  empowered  it  to  invoke,  could  not  provide 
the  necessary  machinery  for  the  settlement  of  industrial 
disputes. 

The  inability  of  one  court  to  cope  with  the  increasing 
number  of  industrial  disputes  and  to  settle  all  the  ques- 
tions giving  rise  to  and  arising  out  of  such  disputes  com- 


"Broadhead,  op.  cit,  p.  20. 


28  A   LEGAL  MINIMUM   WAGE 

pelled  New  Zealand  to  make  a  new  trial  of  the  method  of 
conciliation.  In  1908,  the  Parliament  of  the  colony  au- 
thorized the  governor  to  appoint  four  commissioners  of 
conciliation,  each  for  a  period  of  three  years.^^  When  an 
industrial  dispute  arose  in  any  industry,  one  of  the  com- 
missioners was  to  repair  immediately  to  the  place  and 
was  to  use  every  means  in  his  power  to  bring  the  parties 
together.  In  case  of  failure  to  bring  the  parties  together, 
the  commissioner  was  authorized  to  form  a  council  of 
conciliation.  Employers  and  employes  were  to  nominate 
a  number  of  persons  to  represent  them  and  the  commis- 
sioner was  authorized  to  select  three  persons  from  those 
nominated  by  each  side  to  act  as  members  of  the  council 
of  conciliation.  The  method  of  procedure  to  be  adopted 
by  the  councils  of  conciliation  was  in  all  respects  similar 
to  that  of  the  boards  of  conciliation  as  these  had  existed 
prior  to  1901.  Every  dispute  in  which  industrial  unions  of 
employers  and  of  employes  were  concerned  had  first  to  be 
referred  to  a  council  of  conciliation  before  being  brought 
before  the  court  of  arbitration.  If  the  parties  came  to  an 
agreement  it  was  to  be  filed  with  the  clerk  of  awards  and 
thereby  acquired  the  force  of  law.  If  the  parties  failed  to 
come  to  an  agreement,  a  recommendation  was  to  be  filed, 
with  the  clerk  of  awards  which  would  acquire  the  force 
of  law  within  one  month  if  neither  party  in  the  meantime 
entered  an  objection.  When  either  party  to  the  dispute 
filed  an  objection  the  case  was  to  be  brought  before  the 
court  for  final  adjudication.  This  second  experiment 
made  by  New  Zealand  in  industrial  conciliation  has  been 
far  more  successful  than  the  first.  Since  1908,  the  greater 
part  of  the  industrial  disputes  have  been  settled  by  con- 
ciliation. Up  to  March  31,  1912,  the  number  of  disputes 
brought  before  the  councils  of  conciliation  was  119.  Out 
of  these,  eighty-six  were  settled  by  mutual  agreement, 


"Industrial  Conciliation  and  Arbitration  Amendment  Act  of  1908, 
sees.  27,  28,  29.  Compulsory  Arbitration  in  New  Zealand  by  James  E. 
Le  Rossignol  and  William  Downey  Steward.  Quarterly  Journal  of 
Economics,  August,  1910. 


COMPULSORY   ARBITRATION    SYSTEM    OF   NEW   ZEAL.\ND  29 

nineteen  were  partly  settled  in  this  way  and  only  four- 
teen were  wholly  referred  to  the  arbitration  court. 

In  order  to  settle  industrial  disputes  the  arbitration 
court  of  New  Zealand  is  empowered  to  pass  on  all  ques- 
tions connected  with  the  labor  contract  which  give  rise 
to  such  disputes.  The  court  has,  therefore,  full  and  com- 
plete powers  of  regulating  wages,  hours  and  working 
conditions  generally  as  well  as  the  number  of  apprentices 
in  those  trades  in  which  apprenticeship  is  required  and 
also  the  wages  and  conditions  of  apprenticeship.  It  fixes 
general  rates  of  wages,  both  by  time  and  piece,  and  has 
even  gone  so  far  as  to  grant  preference  to  unionists  on 
condition  that  the  union  rules  be  such  as  to  allow  any  per- 
son working  in  the  trade  to  become  a  member.  Its  gen- 
eral regulations  in  regard  to  wages,  and  especially  in  re- 
gard to  piece  rates,  do  not  posses  the  same  flexibility  as 
those  of  a  trade  union.  For  instance,  we  find  many 
questions  which  are  matters  of  collective  bargaining  in  an 
industry  like  mining  but  which  cannot  be  covered  by  a 
general  agreement. 

The  advocates  of  compulsory  arbitration  contend  that 
the  demands  of  the  laborer  can  be  better  satisfied  and  the 
welfare  of  the  community,  as  a  whole,  better  attained  by 
law  than  by  collective  bargaining.  They  contend  that 
collective  bargaining  often  breaks  down  and  subjects 
the  community  to  a  condition  of  industrial  warfare  with 
its  resultant  evils.  This  warfare  with  all  its  bitter  con- 
sequences, they  believe,  can  be  avoided  by  passing  a  com- 
pulsory arbitration  law.  Such  a  law,  they  contend,  would 
make  a  vast  improvement  in  the  present  condition  of 
workers;  for  those  who  experience  the  benefits  of  trade 
unionism  at  the  present  time  are  only  a  small  per  cent,  of 
the  great  body  of  workers  who  have  nothing  to  protect 
them  against  a  one-sided  bargain,  against  the  oppression 
of  employers  and  against  poverty  wages.  Even  the  or- 
ganized workers,  it  is  asserted,  will  be  better  off.  They 
will  feel  more  secure  under  a  system  of  compulsory  ar- 


30 


A   LEGAL  MINIMUM   WAGE 


birtation  than  under  a  system  of  voluntary  arbitration, 
for  they  will  not  be  exposed  to  the  ruinous  consequences 
of  strikes ;  they  will  not  be  exposed  to  the  danger  of  hav- 
ing their  unions  disorganized  and  themselves  reduced 
once  more  to  the  condition  of  the  unorganized  workers. 

It  was  such  ideals  as  these  that  moved  the  New  Zea- 
landers  to  enact  a  system  of  compulsory  arbitration.  As 
to  how  far  these  ideals  have  been  attained,  the  experience 
of  the  past  twenty  years  can,  at  least,  give  us  a  partial 
answer.  It  is  frequently  asserted  that  New  Zealand  is  a 
land  without  strikes.  This,  of  course,  can  be  true  only  in 
so  far  as  the  workers  of  the  colony  come  under  the  juris- 
diction of  the  arbitration  court  and  observe  its  decrees. 
In  1912,  only  a  little  over  one-fifth  of  the  workers  of  New 
Zealand  (60,622  out  of  an  estimated  total  of  300,000)  be- 
longed to  registered  unions  and,  therefore,  came  under 
the  court's  jurisdiction.  The  other  four-fifths  of  the 
workers  may,  at  any  time,  have  recourse  to  strikes  in 
order  to  obtain  an  increase  of  wages,  shorter  hours,  or 
improved  working  conditions.  During  the  period  be- 
tween 1896  and  1906,  the  law  was  very  effective  in  pre- 
venting strikes  among  the  workers  to  whom  it  applied, 
but  the  same  cannot  be  said  of  the  period  between  1906 
and  1913.  The  number  of  strikes  which  took  place  in  New 
Zealand  in  this  latter  period  amounted  in  all  to  sixty- 
three,  thirty  of  which  were  in  open  violation  of  the  awards 
of  the  court.  This  number  does  not  appear  to  be  very 
large  but  it  must  be  remembered  that  the  number  of 
strikes  in  New  Zealand  was  never  very  large.  The  con- 
stantly increasing  prosperity  of  the  colony  during  the 
past  quarter  of  a  century  has  tended  to  mitigate  those 
abuses  which  strikes  are  intended  to  remedy.  In  view  of 
the  increasing  prosperity  all  recognized  the  necessity  of 
an  increase  of  wages  when  the  law  was  first  passed.  This 
fact  of  itself  naturally  facilitated  the  work  of  the  court 
and,  of  course,  the  workers  were  well  satisfied  with  its 
awards  so  long  as  they  were  being  granted  a  constant 


COMPSULSORY   ARBITRATION   SYSTEM   OF   NEW   ZEALAND       31 

increase  of  wages.  It  was  only  about  1906,  when  the 
court  no  longer  granted  the  same  increase  of  wages,  that 
the  workers  began  to  grow  dissatisfied  with  its  awards 
and  to  criticize  the  action  of  the  court.  The  first  evi- 
dence of  dissatisfaction  appeared  in  the  seamen's  union 
which  was  denied  an  increase  of  wages  on  the  ground  that 
no  substantial  change  of  conditions  had  taken  place  since 
the  last  award  went  into  effect. 

The  first  strike  under  the  New  Zealand  Act  took  place 
on  the  Auckland  Tramways  in  November,  1906.  Two  men 
had  been  dismissed  by  the  company  for  refusing  to  teach 
beginners,  and  as  a  protest  against  their  dismissal  all  the 
employes  of  the  company  went  out  on  strike  six  months 
later.  Soon  after  the  strike  had  been  declared  the  em- 
ployers and  employes  of  the  company  held  a  conference, 
which  resulted  in  the  company's  consenting  to  take  back 
the  men  who  had  been  dismissed.  Some  time  later  both 
the  employers  and  employes  were  brought  before  the 
court.  The  employers  were  charged  with  dismissing  a 
number  of  men  without  due  notice.  The  court  held  that 
this  act  of  the  employers  was  a  violation  of  the  law  and 
accordingly  imposed  a  penalty  of  five  pounds,  with  costs. 
The  men  were  charged  with  aiding  and  abetting  strikes 
for  which  they  were  fined  one  pound  each  by  the  court. 
In  February,  1907,  the  slaughtering  men  employed  in 
the  freezing  works  in  the  neighborhood  of  Wellington, 
struck  for  higher  wages  and  better  working  conditions. 
This  strike  ended  in  a  complete  victory  for  the  men,  the 
employers  having  been  forced  to  accede  to  their  demands 
at  every  point.  The  members  of  the  slaughteringmen 's 
union  were  later  brought  before  the  court  for  violating 
the  provisions  of  the  Act,  but  were  exonerated  on  a  mere 
technicality."  Since  1907  no  year  has  passed  in  New  Zea- 
land without  its  quota  of  unlawful  strikes.    In  October, 


"Aves,  Report  to  Secretary  of  Home  Department  on  the  Wages- 
Board  and  Industrial  Concilation  and  Arbitration  Acts  in  Australia 
and  New  Zealand. 


32  A   LEGAL  MINIMUM   WAGE 

1913,  a  strike  was  started  by  a  branch  of  the  Waterside 
Workers'  Union  at  Wellington  which  theatened  to  be  the 
largest  ever  experienced  in  the  history  of  the  colony.  No 
sooner  had  the  waterside  workers  gone  ont  on  strike  than 
they  were  joined  by  those  of  Lydelton,  Auckland  and 
Dunedin,  thus  bringing  the  number  of  those  on  strike  to 
about  5,000.  About  2,000  miners  and  5,000  others  workers 
also  went  on  strike  at  the  same  time.  For  a  while  it 
seemed  as  if  this  strike  was  going  to  break  down  the 
whole  legal  machinery  of  the  Industrial  Conciliation  and 
Arbitration  Act.  The  government,  however,  was  finally 
able  to  foil  the  projects  of  the  strikers  and  compel  them 
to  conform  to  the  decree  of  the  Arbitration  Court. ^* 

One  reason  for  emphasizing  these  strikes  which  have 
occurred  in  New  Zealand  since  1907  is  to  give  the  reader 
an  idea  that  industrial  peace  is  still  a  long  way  off  in  this 
land  of  radical  social  reforms.  The  conclusion  which 
may  be  legitimately  drawn  from  these  strikes  in  New  Zea- 
land is  that  complete  State  regulation  of  the  labor  con- 
tract is  far  from  being  a  universal  panacea  for  industrial 
disputes,  the  reason  being  that  it  is  very  difficult  for  the 
State  to  enforce  laws  to  which  a  large  and  strongly  or- 
ganized body  of  its  citizens  is  opposed.  It  may  be  that 
compulsory  arbitration  has  i^roved  to  be  a  two-edged 
sword ;  that  it  had  provided  a  remedy  for  many  industrial 
disputes  which  otherwise  might  have  ended  in  long-drawn 
out  conflicts,  but  that  at  the  same  time  it  has  given  rise  to 
a  needless  multiplication  of  disputes  and,  therefore,  to  a 
State  regulated  labor  contract  in  many  instances  where 
it  was  altogether  unnecessary.^^ 

As  has  been  already  noted  New  Zealand  in  order  to 
settle  industrial  disputes  by  judicial  decisions  had  to 
find  a  legal  or  judicial  solution  for  the  various  questions 
arising  between  employers  and  employes  which  might 


"General  Strike  in  New  Zealand,  in  American  Economic  Review, 
June,  1914.    By  J.  E.  LeRossignol. 
=^'Aves,  op.  cit.,  p.  103-107. 


COMPULSORY   ARBITRATION   SYSTEM   OF   NEW   ZEALAND  33 

give  rise  to  such  disputes.  Among  the  most  important 
of  these  was  the  question  of  wages.  The  court  was, 
therefore,  called  upon  to  determine  minimum  rates  of 
wages  for  workers  of  all  grades,  for  those  who  were  very 
poorly  paid  as  well  as  for  those  who  were  well  paid. 
In  regard  to  women's  wages,  however,  the  sphere  of  the 
court's  action  was  rather  restricted;  for  the  law  pre- 
scribed a  flat  rate  of  not  less  than  5s  ($1.20)  a  week  as  the 
minimum  amount  to  be  paid  to  boys  and  girls  under  six- 
teen years  of  age,  from  the  first  day  of  their  emplojTuent 
in  any  industry ;  this  minimum  to  be  thereafter  increased 
at  the  rate  of  35.  ($.72)  a  week  at  the  end  of  each  year  of 
employment,  until  it  reached  the  sum  of  205.  ($4.86)  a 
week.  This  provision  seems  to  have  practically  removed 
the  question  of  women's  wages  from  the  sphere  of  the 
court's  action.  Only  in  one  case  in  the  clothing  trade  was 
it  called  upon  to  make  an  award^®  in  women's  wages  be- 
tween 1894  and  1907. 

In  the  beginning,  the  task  of  the  court  in  determining 
wages  was  comparatively  simple,  for  all  recognized  the 
necessity  of  an  increase.  It  was  only  after  a  general  level 
of  wages  had  been  reached  and  all  were  receiving  fairly 
high  wages  that  the  work  of  the  court  became  specially 
difficult.  Employes  could  not  then  present  the  same  co- 
gent reasons  for  a  further  increase.  The  only  basis, 
therefore,  on  which  a  further  increase  of  wages  could  be 
demanded  was  the  increase  of  profits,  an  argument  which, 
although  sometimes  influencing  the  decision  of  the  court, 
was  never  generally  accepted  as  a  basis  for  regulating 
wages,  for  the  reason  that  it  was  impossible  to  fix  any 
general  standard  rate  of  wages  based  on  profits.  What 
might  seem  a  fair  wage  in  one  industry  from  the  point 
of  view  of  profits,  might  be  ruinous  to  other  industries 
whose  existence  was  equally  necessary  to  the  community. 
The  court  was  then  in  a  dilemma  between  satisfying  the 


"Aves,  op.  cit.,  88. 


34  A   LEGAL   MINIMUM   WAGE 

demands  of  employes  and  placing  a  serious  obstacle  to 
the  industrial  progress  of  the  country.  But  the  industrial 
progress  of  the  country  could  not  be  sacrificed  in  order 
to  satisfy  the  passing  demands  of  the  workmen.  The 
courts  have,  therefore,  been  compelled  to  deny  an  increase 
of  wages  in  very  many  instances,  with  the  result  that 
the  laborers  have  become  very  critical  and  dissatisfied, — 
so  much  so  that  many  of  them  have  declared  their  willing- 
ness to  return  to  the  old  methods  of  dealing  with  their 
employers. 

The  New  Zealand  court  has  been  authorized  to  grant 
permits  to  infirm,  old  or  slow  workers  to  work  for  less 
than  the  minimum  fixed  by  the  court  award.  Originally 
this  function  belonged  to  the  unions,  but  so  many  were 
the  abuses  of  the  power  of  the  unions  in  the  matter  that 
it  was  found  necessary  to  have  it  taken  over  by  the  court. 
The  unions  were  naturally  opposed  to  granting  a  large 
number  of  permits,  for  they  knew  that  the  number  of 
inefficient  workers  would  be  greatly  increased  thereby, 
and  they  feared  lest  these  might  come  to  take  the  place 
of  the  efficient  workers.  By  reason  of  the  attitude  of 
the  unions  towards  the  permit  question,  the  worker  who 
could  not  earn  the  minimum  prescribed  by  the  court  found 
it  very  difficult  to  obtain  any  employment  at  all.  In  1908 
the  law  was  so  modified  as  to  enable  those  desiring  per- 
mits to  apply  directly  to  the  court,  but  the  court  before 
granting  permits  must  still  consult  the  union  to  which 
the  worker  seeking  for  a  permit  belongs. 

Since  1900  the  New  Zealand  system  of  compulsory 
arbitration  has  been  introduced  into  most  of  the  Austra- 
lian states.  In  Western  Australia  and  also  in  the  Austra- 
lian Commonwealth,  the  courts  are  the  only  institutions 
for  settling  industrial  disputes  and  regulating  other  ques- 
tions arising  between  employers  and  employes.  In  Vic- 
toria, New  South  Wales  and  South  Australia  the  court 
operates  side  by  side  with  special  boards,  which  will  be 
discussed  in  the  next  chapter.    These  are  made  up  of  an 


COMPULSORY   ARBITRATION   SYSTEM   OF   NEW   ZEALAND  35 

equal  number  of  employers  and  employes  and  an  out- 
side, non-partisan  chairman. 

They  determine  wages  and  working  conditions,  but 
there  is  always  the  right  of  appeal  to  the  courts  against 
their  determinations.  The  first  state  of  the  Australian 
continent  to  establish  a  compulsory  arbitration  court  was 
New  South  Wales.  Like  the  New  Zealand  law,  that  of 
New  South  Wales  did  not  provide  for  any  district  boards 
of  conciliation.  As  a  concession  to  the  opposition  of 
employers,  the  first  New  South  Wales  law  was  made  a 
temporary  measure  to  be  suspended  in  1908.  In  that 
year  it  was  replaced  by  a  sort  of  a  dual  system  in  which 
the  special  boards  worked  in  conjunction  with  the  arbi- 
tration court.  In  1902,  Western  Australia  provided  for  a 
system  of  industrial  conciliation  and  arbitration  almost 
exactly  similar  to  that  of  New  Zealand.  District  boards 
of  conciliation  were  provided  for,  but,  as  in  New  Zealand, 
they  have  been  a  failure  and  have  practically  been  unused 
since  1903.  In  1904  the  Commonwealth  Parliament 
passed  its  Industrial  Conciliation  and  Arbitration  Act 
for  the  purpose  of  settling  disputes  in  industries  which 
do  not  fall  within  the  jurisdiction  of  any  state.  The 
Commonwealth  act  provides  for  an  Industrial  Arbitra- 
tion Court  for  the  whole  country,  consisting  of  one  judge 
from  the  supreme  bench.  No  provision  is  made  as  in 
New  Zealand  and  Western  Australia  for  district  boards 
of  conciliation.  With  the  passing  of  the  excise  tariff 
in  1906,  since  declared  unconstitutional,  it  looked  as  if 
the  commonwealth  court  was  about  to  assume  a  very  im- 
portant position  in  regulating  the  labor  conditions  of  the 
whole  country.  This  excise  act  imposed  duties  on  certain 
imported  articles,  with  the  provision  that  the  court  could 
remove  these  duties  in  particular  instances  if  it  was  per- 
suaded that  persons  employed  in  their  manufacture  were 
receiving  fair  and  reasonable  wages. 


CHAPTER  IV 

WAOES  BOARDS  IN  VICTORIA 

The  Australasian  experiment  in  wage  legislation  which 
has  the  greatest  interest  for  Americans  at  the  present 
time  is  the  Victoria  wage  board  system,  both  on  account 
of  the  recent  adoption  of  a  similar  system  in  several  of 
our  states  for  women  and  minors  and  because  of  the 
movement  for  its  adoption  in  other  states.  Victoria  has 
always  been  the  premier  state  in  Australia  in  factory 
legislation,  but  notwithstanding  its  strict  factory  laws, 
sweating  still  continued  to  exist  within  its  borders.  Vic- 
toria, however,  was  determined  that  so  far  as  it  was  con- 
cerned, an  end  should  be  made  of  sweating.  As  early  as 
1882,  a  Royal  commission  was  appointed  to  investigate 
the  sweating  evil  in  the  principal  cities  of  the  state.  As 
a  result  of  the  report  of  this  commission,  a  strict  code 
of  factory  laws  was  drawn  up  in  1885.  In  1890  fresh 
legislation  was  passed,  but  in  spite  of  this  legislation 
sweating  still  continued.^^  In  1893,  a  Parliamentary 
Board  was  appointed  to  inquire  into  and  report  on  the 
working  of  previous  legislation.^^  The  result  of  this  in- 
vestigation was  the  passing  of  the  Factories  and  Shops 
Act  of  1896,  which  made  provision  for  the  creation  of 
special  wages  boards  in  certain  sweated  trades — clothing, 
wearing  apparel,  including  boots  and  shoes,  furniture  and 


"For  a  more  complete  account  of  this  legislation,  see  Reeves  State 
Experiments  in  Australia  and  New  Zealand,  p.  7. 

-'This  investigation  of  the  Parliamentary  Board  found  the  home 
workers  at  Melbourne  earning  miserably  low  wages;  it  found  that  home 
work  was  on  the  increase  and  that  the  factories  were  suffering  as  a 
consequence  and  it  also  found  that  the  native  workers  were  suffering 
as  a  result  of  the  great  increase  of  Chinese  labor,  especially  in  the 
furniture  trade.  The  board,  however,  did  not  go  so  far  as  to  recom- 
mend the  legal  regulation  of  wages  as  a  remedy  for  sweating.  The 
plan  embodied  in  the  legislation  of  1894  was  first  conceived  by  Sir 
Alexander  Peacock.  Sir  Alexander  thought  that  the  law  should  do  for 
the  unorganized  workers  what  collective  bargaining  had  done  for  the 
organized  workers.  (See  Hammond,  Quarterly  Journal  of  Economics, 
vol.  XXIX,  no.  1,  pp.  105,  109.) 

36 


WAGES   BOARDS   IN  VICTORIA  37 

bread-baking.^^  In  1900  the  trade  of  butcher  was  added 
to  those  already  included  under  the  law,  and  provision 
was  made  for  the  creation  of  boards  in  other  trades.  It 
was  provided  that  as  the  occasion  arose,  Parliament 
might,  on  application  from  the  employers,  employes  or 
labor  department,  authorize  the  creation  of  a  special 
board  in  any  other  trade.^^  The  employes  may  apply  for  a 
board  to  increase  wages  or  to  improve  working  conditions. 
Employers  may  apply  for  one,  in  order  to  put  an  end 
to  unscrupulous  competition ;  or  when  already  bound  by 
board  determination,  they  may  apply  for  the  creation  of 
a  board  or  boards  in  competing  industries.^^  In  1903,  a 
court  of  industrial  appeals  was  established  in  Victoria 
to  which  appeal  might  be  taken  from  the  determina- 
tion of  the  special  boards.^"  So  far  as  its  adminis- 
trative features  are  concerned,  the  law  of  1903  re- 
mains practically  unchanged  to  the  present  time.  In 
regard  to  the  sphere  of  the  application,  it  has  been  made 
a  good  deal  more  definite  and  specific.  It  was  possible 
for  the  sweating  subcontractor  under  the  law  of  1903  to 
employ  Chinese  labor  and  thus  evade  the  provisions  of 
the  law.  Such  an  evasion  is  impossible  under  the  present 
law ;  for  the  definition  of  a  factory  has  been  so  extended 
as  to  include  all  places  in  which  one  or  more  Chinese  per- 
sons are  directly  or  indirectly  employed.  Under  the  pro- 
visions of  the  present  law  are  also  included  all  places  in 
which  one  or  more  persons  are  employed  in  the  manu- 
facture of  furniture  and  all  places  in  which  one  or  more 
persons  are  employed  in  the  baking  of  bread  for  sale. 


=»Aves.  Report  to  Secretary  of  Home  Department  on  the  Wages 
Boards  and  Industrial  Conciliation  and  Arbitration  Acts  in  Australia 
and  New  Zealand,  p.  12.  It  is  interesting  to  note  that  Mr.  Peacock, 
who  introduced  the  bill  intended  that  it  should  only  apply  to  women  and 
children,  but  in  this  he  was  overruled  by  Parliament.  Hammond, 
Quarterly  Journal  of  Economics,  vol.  XXIX,  p.  111. 

"The  scope  of  the  law  was  thus  extended  in  response  to  the  demands 
both  of  employers  and  employes. 

"Aves.,  op.  cit.,  p.  17.    Hammond,  ibid.,  p.  120. 

'''Hammond,  ibid.,  p.  144. 


A   LEGAL  MINIMUM   WAGE 


Under  the  Victoria  system  wages  are  fixed  not  by  a 
court,  which,  however  well  considered  its  decisions  may 
be,  cannot  have  the  necessary  technical  knowledge  to 
secure  equal  justice  all  around,  but  by  a  board  whose 
members  are  supposed  to  be  acquainted  with  the  tech- 
nical details  of  the  business.  The  special  wages  boards 
in  Victoria  are  made  up  of  not  less  than  two  and  not  more 
than  five  employers,  together  with  an  equal  number  of 
employes  and  an  outside  non-partisan  chairman.  The 
representatives  of  the  employers  and  employes  are  nomi- 
nated by  the  minister  of  labor,  by  notice  in  the  govern- 
ment gazette.  Unless  either  one-fifth  of  the  employers 
or  employes  object  to  the  nominees  of  the  minister,  the 
nomination  is  confirmed.  If  they  object,  an  election  is 
held  in  which  every  employer  and  every  employe  over 
eighteen  years  old  has  a  vote.  The  chairman  of  the 
board  is  appointed  by  the  governor  from  those  nominated 
by  the  members. ^^ 

The  special  boards  liave  power  to  determine  minimum 
rates  of  wages  both  by  time  and  piece.  The  piece  rate 
must  be  so  arranged  as  to  enable  those  working  under  it 
to  earn  at  least  the  minimum  specified  for  time  workers 
in  the  same  trade.  Boards  also  have  power  to  determine 
the  maximum  number  of  hours  for  which  the  workers 
are  to  be  employed,  and  they  may  fix  special  rates  for 
overtime.  When  the  board  has  made  its  determination, 
it  is  published  in  the  government  gazette  and  becomes 
a  law  within  thirty  days  unless  suspended  by  the  gov- 
ernor or  revoked  by  the  court  of  industrial  appeals.^* 
The  governor  may  suspend  any  determination  of  a  board 
or  award  of  a  court,  for  a  period  not  exceeding  six 
months,  if  he  thinks  that  the  condition  of  the  business 
in  question  demands  such  suspension. ^^     In  case  of  an 


'factories  and  Shops  Act  of  1912,  sec.  137. 

=*Act  of  1912,  sec.  144. 

^'^This  power  was  given  to  the  governor  by  an  amendment  made  in 
1897  as  a  result  of  a  protest  of  the  Boot  and  Shoe  Manufacturers,  Ham- 
mond, ibid.,  124. 


WAGES    BOARDS    IN   VICTORIA  39 

impending  strike  in  the  business,  the  governor  is  author- 
ized to  suspend  a  determination  or  award  for  a  period 
not  exceeding  twelve  months.  In  the  meantime,  the 
board  reviews  the  case  and  if  it  finds  no  good  reason  for 
changing  its  determination,  it  notifies  the  governor  to 
that  effect  and  the  suspension  is  revoked.^" 

Appeal  may  be  taken  from  the  determination  of  any 
board  to  the  court  of  industrial  appeals,  1)  by  the  min- 
ister of  labor;  2)  by  a  majority  of  the  representatives 
of  the  employers  or  employes;  3)  by  any  employer  em- 
ploying not  less  than  25  per  cent,  of  the  workers  in 
any  trade ;  4)  by  25  per  cent,  of  the  workers  in  any  trade." 
When  the  court  makes  an  award  in  a  trade  it  cannot  be 
reviewed  at  a  future  time  by  any  board  without  the 
express  permission  of  the  court. ^^ 

The  principal  object  which  the  Victoria  legislature 
had  in  view  in  1896  was  to  provide  a  remedy  for  the  evil 
of  sweating  in  the  bread-baking,  furniture  and  the  various 
branches  of  the  clothing  trade.  It  scarcely  thought  of 
entirely  substituting  the  principle  of  legal  regulation  for 
that  of  free  contract  as  a  means  of  determining  wages. 
Such,  indeed,  has  been  the  case.^**  The  wages  of  the 
vast  majority  of  the  workers  in  Victoria  are  now  de- 
termined by  law  and  not  by  free  contract.  A  condition 
of  status  has  thus  come  to  take  the  place  of  free  contract. 
And  the  fact  that  both  sides  have  a  say  in  the  regulation 
does  not  change  the  situation  very  materially.  The  rep- 
resentatatives  of  the  employers  and  employes  come  to- 
gether with  essentially  different  and  conflicting  notions 
of  what  fair  wages  and  fair  working  conditions  in  a  trade 
ought  to  be.    This  may  not  be  so  true  when  a  law  of  this 


'"Factories  and  Shops  Act  of  1912,  sec.  84. 

^'There  have  been  only  nine  cases  of  appeal  to  the  court  up  to  the 
end  of  1913.  In  six  of  these  cases,  wages  were  reduced.  In  one,  wages 
were  raised;  in  one,  hours  were  increased;  in  one  case,  the  court  upheld 
the  determination  of  the  board. 

"The  court  gave  the  board  power  to  review  the  Boilermakers'  case 
in  1912;  the  Fellmongers'  case  in  1912;  the  Hairdressers'  case  in  1913; 
the  Icemakers'  case  in  1913;  and  also  the  Starchmakers'  case  in  1913. 

'^Die  Lohnamter  in  Victoria.    Robert  Boehringer,  p.  41. 


40  A   LEGAL  MINIMUM    WAGE 

kind  first  comes  into  effect.  Wages  of  certain  classes  of 
workers  may  be  so  low  that  employers  cannot  reasonably 
object  to  an  increase.  But  outside  this  class  of  very 
poorly  paid  workers  it  will  be  very  difficult  to  secure 
unanimity  among  the  members  of  the  board.  Sometimes 
a  compromise  is  effected,  but  it  is  effected  under  legal 
duress,  for  the  party  which  is  opposed  to  the  compromise 
realizes  that  something  worse  may  be  forced  upon  it  by 
the  chairman,  who  is  really  the  judge  in  the  case.  In 
some  instances  any  compromise  will  be  impossible.  Then 
it  will  rest  with  the  chairman,  who  is  really  the  judge 
in  the  case,  to  determine  on  which  side  justice  lies. 

The  chairman,  therefore,  occupies  a  very  important 
position  in  the  Victorian  special  boards.  His  position  is 
really  that  of  a  judge  and  unless  he  is  specially  acquainted 
with  the  technicalities  of  the  trade  and  has  a  special  skill 
in  drawing  out  the  best  points  brought  forward  by  both 
sides,  the  special  boards  will  differ  little  from  an  arbitra- 
tion court.  For  this  reason  it  is  all-important  that  some 
person  of  business  experience  be  chosen  as  chairman  of 
a  board  and  that  the  same  person  continue  to  devote  the 
whole  or  a  greater  part  of  his  time  for  this  work.  In  Vic- 
toria, business  experience  does  not  seem  to  enter  very 
largely  into  the  selection  of  the  chairmen  of  the  special 
boards.  It  may  possibly  be  very  difficult  to  secure  per- 
sons of  business  experience  who  are  capable  of  main- 
taining a  strictly  neutral  position.  In  Victoria,  however, 
there  seems  to  be  some  disposition  to  look  upon  the  chair- 
manship of  the  boards  as  a  special  calling  in  which  the 
same  persons  should  be  perpetuated.  Between  1896  and 
1907  one  person  presided  as  chairman  over  twelve  boards 
and  another  over  eight. 

Up  to  December  31,  1913,  one  hundred  and  thirty-one 
(131)  special  boards  had  been  created  in  Victoria,  affect- 
ing 150,000  workers.^"    One  hundred  and  twenty-nine  of 


"Report  of  Chief  Inspector  of  Factories,  1913,  p.  7. 


WAGES   BOARDS   IN   VICTORIA  41 

these  boards  had  made  determinations  under  which  were 
included  workers  of  all  kinds  from  the  most  highly  skilled 
and  best  paid  to  those  in  the  sweated  trades,  where  very 
little  skill  is  required  and  where  wages  had  been  very 
low.  Naturally  those  who  have  profited  most  by  the 
board  determinations  were  the  poorly  paid  workers.  The 
increase  of  wages  received  by  this  class  of  workers  was 
very  noticeable,  being,  on  the  average,  55  per  cent.  Thus 
the  brushmakers'  wages  were  increased  from  $5.64  to 
$10.66  a  week,  or  89  per  cent.,  and  the  dressmakers'  from 
$2.92  to  $6.77,  or  132  per  cent.  As  we  ascend  the  economic 
scale  and  come  to  those  receiving  fairly  good  wages,  the 
increase  was  not  so  marked.  Thus  the  butchers'  wages 
were  increased  from  $9.20  to  $11.06,  or  20  per  cent. ;  and 
the  printers'  from  $9.25  to  $12.67,  or  37  per  cent.  The 
class  receiving  the  smallest  increase  of  wages  was  that 
of  the  highly  skilled  and  best  paid  workers.  Thus  the 
bricklayers'  wages  were  increased  from  $15.29  to  $17.56, 
or  14  per  cent.,  and  gold  miners'  from  $10.88  to  $12.05,  or 
11  per  cent. 

When  Victoria  began  to  regulate  wages  by  law  in 
1896,  it  did  not  adopt  any  definite  principle  upon  which 
to  base  its  regulations.  In  the  beginning,  of  course,  the 
necessity  for  such  a  principle  was  not  so  keenly  felt,  for 
the  operation  of  the  law  was  confined  to  the  sweated 
trades,  in  which  all  felt  that  an  increase  of  wages  was 
necessary.  In  granting  this  increase  the  boards  would 
naturally  start  from  a  cost  of  living  basis.  The  increase 
granted  would  be  based  on  the  board's  estimate  of  the 
amount  necessary  to  maintain  the  workers  in  health  and 
efficiency.  The  board's  estimate,  however,  was  not  based 
on  any  scientific  data  in  regard  to  the  cost  of  living.  It 
satisfied  itself  with  the  ordinary  every-day  knowledge 
in  this  matter. 

As  the  number  of  boards  increased  and  as  the  regu- 
lation of  wages  became  more  general,  it  was  felt  that 
some  principle  should  be  embodied  in  the  law  to  guide 


42  A    LEGAL  MINIMUM    AVAGE 

the  boards  in  tlieir  determinations.  It  was  for  the  pur- 
pose of  establishing  such  a  principle  that  the  govern- 
ment incorporated  the  respectable  employers'  clause  in 
the  legislation  of  1903,  obliging  the  boards  to  base  their 
determinations  on  the  wages  paid  by  respectable  em- 
ployers in  each  trade.  But  this  clause  rather  retarded 
than  facilitated  the  work  of  the  boards.  There  was  room 
for  considerable  difference  of  opinion  about  the  meaning 
of  the  phrase  ''respectable  employers."  The  members 
of  the  agricultural  board  could  not  arrive  at  any  deter- 
mination because  the  representatives  of  the  employers 
and  employes  held  conflicting  opinions  about  the  meaning 
of  the  ''respectable  employer"  clause.  This  clause  also 
prevented  the  members  of  the  cycle  board  from  arriving 
at  a  determination  because  they  felt  that  they  could 
not,  in  view  of  it,  establish  a  sufficiently  high  minimum. 
By  reason  of  the  difficulties  which  it  created,  Parliament, 
at  the  suggestion  of  the  minister  of  labor,  repealed  the 
"respectable  employers"  clause  in  1907. 

A  number  of  authorities  on  Australasian  wage  leg- 
islation point  to  the  well-known  decision  of  Justice  Hig- 
gins,  of  the  Commonwealth  Court,  as  paving  the  way 
towards  the  adoption  of  a  new  principle  in  wage  determi- 
nations in  the  Australasian  colonies.  Justice  liiggins 
concluded  that  the  wages  of  the  unskilled  workers  ought 
to  be  such  as  to  satisfy  their  needs  as  normal  human  be- 
ings in  a  civilized  community.  In  regard  to  the  skilled 
workers,  he  believed  that  the  same  ratio  should  be  main- 
tained between  their  wages  and  the  wages  of  the  unskilled 
as  existed  before  the  board's  determination.  If,  there- 
fore, an  unskilled  worker  was  granted  an  increase  of  5 
per  cent,  in  his  wages  by  the  board,  Justice  Higgins 
thought  that  the  same  increase  should  be  granted  to  the 
skilled  worker.  The  decision  of  the  Commonwealth  Court 
has  done  a  great  deal  towards  fostering  a  more  scientific 
employment  of  the  cost  of  living  basis  as  a  method  of 


WAGES   BOARDS   IN    VICTORIA  43 

determining  wages  in  Victoria  and  other  Australasian 
states. 

One  of  the  main  difficulties  experienced  in  the  fixing 
of  a  minimum  wage  in  Victoria  was  the  making  of  pro- 
vision for  those  who  were  unable  to  earn  the  prescribed 
minimum.  The  law  provided  for  the  granting  of  permits 
to  the  infirm,  old,  or  slow  workers.  It  authorized  the  in- 
spector of  factories  to  grant  permits  to  such  workers,  pro- 
vided the  number  of  them  in  any  factory  did  not  exceed 
one-fifth  of  the  total  number  of  workers  employed.  At  first 
the  workers  had  to  give  proof  of  age,  infirmity  or  other 
disability  in  order  to  obtain  a  permit  to  work  for  less 
than  the  minimum.  Now  the  fact  that  a  worker  is  unable 
to  earn  the  minimum  is  a  sufficient  qualification  for  the 
obtaining  of  a  permit.  Since  1907  the  problem  of  those 
incapable  of  earning  the  minimum  has  been  looked  upon 
as  a  problem  demanding  the  special  attention  of  the 
boards.  The  boards  have  been  authorized  to  fix  special 
rates  affecting  the  infirm,  old  and  slow  workers. 

Even  with  this  special  provision  for  the  fixing  of  a 
lower  rate  of  wages,  the  problem  of  those  unable  to  earn 
the  minimum  has  by  no  means  been  solved.  Many  have 
been  altogether  displaced  by  the  board  determinations. 
Some  employers  in  Victoria,  it  is  said,  dismissed  sixty 
or  seventy  hands  when  the  law  went  into  effect.*^  "It 
has  been  my  duty, ' '  wrote  the  chief  inspector  of  factories 
in  1898,  "to  listen  to  the  histories  of  the  old  and  slow 
workers.  No  duty  has  been  more  painful  to  me  and  none 
feels  more  than  I  do,  that  some  provision  should  be  made 
for  such  workers"*-  The  problem  of  displacement  will 
become  all  the  more  serious  when  there  is  a  surplus  of 
labor  and  a  falling  market.  Neither  phenomenon  has 
so  far  been  experienced  in  Victoria.  There  has  been  a 
continuous  complaint  among  the  manufacturers  of  this 
and  other  Australian  states  in  recent  years,  about  the 


*'Clark,  Labor  Movement  in  Australasia,  p.  33. 
*-Aves,  op.  cit.,  60. 


44  A   LEGAL  MINIMUM   WAGE 

scarcity  of  labor.  Since  1896  Victoria  has  enjoyed  a 
period  of  almost  unbroken  prosperity.  Industry  seems 
to  have  increased  faster  than  population.  These  two 
facts  have,  undoubtedly,  minimized  the  difficulties  of 
minimum  wage  legislation  in  that  state.  They  have  un- 
doubtedly prevented  the  displacement  of  the  weaker 
workers  from  becoming  as  serious  a  problem  as  it  might 
have  become  in  other  countries  with  a  surplus  population 
and  subject  to  constant  market  fluctuations.  These  facts 
should  prevent  us  from  drawing  any  dogmatic  conclusions 
about  the  effects  of  minimum  wage  legislation  in  Victoria 
or  the  applicability  of  such  legislation  to  other  countries, 
at  least  in  the  same  form  and  to  the  same  extent  in  which 
it  has  been  applied  in  Victoria.  They  render  the  Vic- 
toria experience  less  useful  than  it  otherwise  might  be. 

How  far  the  increase  of  wages  in  Victoria  during  the 
past  eighteen  years  has  been  due  to  the  special  boards 
and  how  far  to  general  economic  causes,  such  as  the 
scarcity  of  labor  and  increasing  prosperity,  it  is  very  diffi- 
cult to  say.  The  board  determinations  have  in  all  proba- 
bility increased  wages  in  the  sweated  trades  to  a  greater 
degree  than  could  otherwise  have  been  the  case.  In  the 
clothing  trade,  which  is  the  most  important  trade  in 
Melbourne,  there  existed  a  considerable  amount  of  sweat- 
ing prior  to  1896.  The  increase  of  wages  in  this  trade 
has  been  very  noticeable.  According  to  the  report  of 
the  factory  inspector,  the  average  wages  of  the  1,105 
adult  males  employed  in  the  clothing  industry  in  1913 
was  $14.60  a  week,  and  the  average  wage  of  the  4,683 
adult  females  was  $6.67  a  week.  Before  the  creation  of 
the  board  in  1896,  the  average  wages  of  all  the  3,383  adult 
workers  employed  in  this  industrj^  was  $4.86  a  week.*'' 
Furniture  is  the  only  trade  in  which  a  remnant  of  sweat- 
ing still  persists.  The  presence  of  Chinese  labor  has 
complicated  matters  considerably  in  this  trade.  The 
strictest  possible  measures  have  been  taken  to  prevent 


"Report  of  the  Inspector  of  Factories,  1913,  p.  144. 


WAGES   BOARDS   IN   VICTORIA  45 

the  Chinese  from  evading  the  law.  Every  place  where  a 
Chinaman  is  employed  has  been  declared  a  factory,  and, 
therefore,  subject  to  the  provisions  of  the  law  in  regard 
to  registration  and  compliance  with  board  determina- 
tions. No  Chinaman  is  allowed  to  work  before  the  hour 
of  7.30  a.  m.  or  after  5  p.  m.  But  in  spite  of  these  strict 
measures,  the  Chinese  still  continue  to  evade  the  law. 

In  Victoria,  labor  unions  do  not  constitute  a  necessary 
element  in  the  framework  of  the  law  as  they  do  in  New 
Zealand.  The  first  concern  of  the  Victoria  law  was  the 
workers  in  the  sweated  trades,  where  no  organization 
existed  and  where  there  was  very  little  hope  of  effecting 
any  organization.  The  law  at  first  took  the  place  of 
organization  in  sweated  trades.  It  did  not  presuppose 
organization  or  make  any  provision  for  it  as  did  the 
New  Zealand  law.  The  fact  that  the  workers  were  called 
upoD  to  select  their  representatives  on  the  boards  must, 
however,  have  given  considerable  impetus  to  organization 
among  them.  The  main  purpose  of  organization,  it  is 
true,  was  fulfilled  by  the  law ;  yet  there  was  considerable 
danger  that  the  law  might  not  be  properly  administered 
and  that  employers  might  exercise  too  much  influence  on 
the  determinations  of  the  boards  if  the  workers  were 
not  organized.  These  facts,  in  all  probability,  account 
for  the  large  percentage  of  unionists  among  the  workers 
under  board  determinations.  In  1911,  80  per  cent,  of  all 
the  workers  subject  to  board  determinations  were  mem- 
bers of  trade  unions. 

If  the  efficiency  of  employers  and  employes  remained 
the  same,  a  natural  result  of  the  increase  of  wages 
granted  by  board  determinations  would  be  an  increase  of 
prices.  This  would  be  specially  true  of  industries  de- 
pending on  a  local  market.  The  same  would  be  true 
in  Australia  of  industries  with  a  state-wide  or  a  nation- 
wide market,  for  most  of  the  industries  of  that  conti- 
nent are  working  under  wages  boards'  determinations 
or  court  decisions.     But  that  prices  have  been  increased 


46  A   LEGAL  MINIMUM   WAGE 

as  the  result  of  board  determinations  is  by  no  means 
certain.  Increased  wages  have  in  all  probalility  in- 
creased the  average  efficiency  of  employers  and  employes. 
The  sphere  of  competition  has  been  changed  from  the 
labor  market  to  the  field  of  business  organization.  The 
skill  and  foresight  of  employers  are  now  directed  towards 
the  securing  of  a  better  business  organization  and  more 
efficient  methods  of  production. 

A  criticism  of  the  Victorian  system,  which  one  fre- 
quently hears,  is  that  it  has  decreased  the  wages  of  the 
more  efficient  workers,  thereby  tending  to  lessen  their 
efficiency.  This  criticism  cannot  be  applied  exclusively 
to  a  legally  determined  wage.  It  is  also  true  in  some 
degree  of  the  standard  rate  of  trade  unionism;  and  in 
regard  to  every  force,  whether  economic  or  legal,  that 
standardizes  wages,  hours  or  working  conditions.  Both 
collective  bargaining  and  legal  regulation,  while  they 
increase  the  wages  of  a  fairly  large  number  of  workers, 
have  a  tendency  to  lower  the  wages  of  a  small  minority. 
But  this  tendency  should  not  be  exaggerated  as  is  fre- 
quently done.  It  should  be  accepted  with  some  im- 
portant qualifications,  as  we  shall  see  more  at  length  in 
a  later  chapter.  This  much,  however,  may  be  said  in 
passing:  that  we  find  many  trades,  especially  those  de- 
manding little  skill,  in  which  a  flat  rate  of  wages  already 
exists;  that  competition  will  still  continue  to  influence 
the  wages  of  the  more  skilled  workers,  and  employers 
will  be  obliged  to  pay  them  wages  higher  than  the  mini- 
mum fixed  by  law. 

The  Victoria  system  was  introduced  into  South 
Australia  in  1900.  At  that  time  authority  was  given  to 
the  minister  of  labor  to  establish  boards  in  the  clothing, 
boot  and  shoe  and  furniture  trades,  and  such  other  manu- 
facture, trade  or  process  as  Parliament  might  in  the 
future  decide.  Up  to  the  end  of  1912,  fifty-six  boards 
were  created  under  this  act,  covering  25,000  employes. 
In  1910  a  wages  board  system  almost  exactly  similar  to 


WAGES   BOARDS'  IN   VICTORIA  47 

that  of  Victoria  was  introduced  in  Tasmania.  In  1908 
New  South  Wales,  Queenland  and  Victoria  adopted  a 
combined  system  of  wages  boards  and  industrial  concilia- 
tion and  arbitration.  In  each  of  these  states  courts  were 
established  for  the  purpose  of  settling  industrial  dis- 
putes. Provision  was  also  made  for  the  establishment  of 
industrial  boards  with  duties  and  powers  similar  to  the 
wages  boards  of  Victoria.  Up  to  April  30,  1914,  208 
boards  had  been  created  in  New  South  Wales,  and  ninety- 
two  in  Queensland.  Every  state  in  the  Australian 
colonies  is  now  trying,  and  has  been  trying  for  some  time 
past,  to  secure  a  living  wage  for  its  workers  by  law.  As 
we  have  seen,  the  machinery  devised  for  this  purpose 
is  of  two  kinds.  Victoria  has  adopted  a  wages  board 
system,  and  New  Zealand  a  system  of  industrial  concilia- 
tion and  arbitration.  Some  of  the  other  states  have  tried 
a  combination  of  the  two  systems.  The  ideal  which  the 
Australians  set  before  them  has  been  fairly  well  attained. 
Wages  in  all  the  states  are  high,  and  especially  the  wages 
of  unskilled  workers.  From  this,  however,  we  should  be 
slow  to  conclude  that  legal  regulation  of  wages,  at  least 
of  all  wages,  would  be  etfective  or  practical  in  other 
countries. 


CHAPTER  V 
ENGLISH  TRADE  BOARDS  ACT 

Ever  since  1876,  England  has  been  trying  to  devise  a 
remedy  for  the  evil  of  sweating.  At  various  times  Par- 
liamentary committees  have  been  appointed  to  investigate 
this  evil  and  to  suggest  a  remedy  for  it.  The  committees 
have  invariably  borne  striking  testimony  to  the  existence 
of  sweating  and  the  disastrous  consequences  attendant 
upon  it.  The  facts  brought  to  light  by  these  investiga- 
tions naturally  gave  rise  to  much  radical  feeling  and 
many  proposals  for  reform.  Some  farseeing  Englishmen 
thought  the  only  really  effective  remedy  for  sweating  was 
the  enforcement  of  a  legal  minimum  wage.  To  the  in- 
vestigators and  the  members  of  Parliament,  however, 
this  remedy  seemed  almost  as  visionary  as  the  proposal 
to  reorganize  industry  on  a  cooperative  basis.  They 
thought  that  the  state  might  intervene  for  the  purpose 
of  protecting  the  laborer  against  abnormally  long  hours 
and  unhealthy  working  conditions,  but  they  could  not  see 
how  it  could  go  so  far  as  to  regulate  wages.  The  only 
remedies  for  the  evil  of  sweating  which  made  any  appeal 
to  the  conservative  Englishman  were  compulsory  regis- 
tration of  outworkers  and  a  stricter  administration  of 
factory  laws.  For  upwards  of  twenty  years  England 
tried  to  apply  these  two  remedies,  but  sweating  still 
continued.  Its  evils,  in  fact,  seemed  to  become  all  the 
greater  the  more  highly  developed  the  industrial  system 
became. 

English  colonists  in  a  far-off  and  less-developed 
country  were  applying  the  best  and  most  direct  means 
of  abolishing,  or  at  least  mitigating  the  evil  of  sweating, 
that  had  been  devised  by  any  modern  country,  but  Eng- 
land remained  skeptical  of  the  effects  of  the  new  remedy 
that  had  been  employed  with  such  success  by  her  colonies. 
Englishmen,  during  those  years,  were  very  much  con- 

48 


ENGLISH  TRADE  BOARD  ACT  49 

cerned  with  the  regulation  of  hours  and  working  condi- 
tions. They  could  not  bear  to  see  the  laborer  working 
long  hours  or  under  conditions  prejudicial  to  his  health 
and  welfare,  and  they  did  not  make  the  same  objection  to 
seeing  him  work  for  wages  that  were  insufficient  to  pro- 
vide him  with  the  necessaries  of  life.  They  either  thought 
that  there  was  no  connection  between  the  amount  of  wages 
paid  to  the  worker  and  his  health  and  welfare,  or,  if 
they  saw  any  connection  between  these  two  phenomena, 
they  did  not  think  that  conditions  could  be  improved  by 
a  legal  regulation  of  wages.  Through  all  this  period 
there  were  only  a  few  faint  voices  advocating  the  de- 
sirability, feasibility  and  necessity  of  a  legal  minimum 
wage.  As  the  evils  of  sweating  became  more  pronounced 
and  as  the  futility  of  all  other  remedies  became  more 
apparent,  the  advocates  of  minimum  wage  legislation  in- 
creased in  number. 

In  May,  1906,  an  exhibition  was  organized  under  the 
auspices  of  the  London  Daily  News,  which  presented  to 
the  public  in  a  very  real  and  lifelike  manner  the  evils  of 
sweating.  Through  this  exhibition  the  few  who  were 
interested  in  providing  a  remedy  for  sweating  were  able 
to  arouse  the  sympathy  of  the  British  people  at  large. 
As  a  result  of  the  exhibition,  the  National  Anti-Sweating 
League  for  the  securing  of  a  minimum  wage  was  organ- 
ized at  a  great  mass  meeting  held  at  Guild  Hall,  London, 
in  1907.  At  this  meeting  200,000  workers  pledged  their 
support  to  the  newly  formed  Anti-Sweating  League  in 
its  compagn  for  a  minimum  wage.  In  the  course  of  its 
first  session  two  methods  of  securing  a  minimum  wage 
were  brought  up  for  consideration  by  the  members  of 
the  league.  The  first  method  was  the  system  of  industrial 
conciliation  and  arbitration  in  vogue  in  New  Zealand. 
This  method  the  league  considered  it  impracticable  to 
introduce  in  England  on  account  of  the  opposition  of 
trade  unionists  to  any  system  of  compulsory  arbitration. 
The  alternative  was  the  wages  board  system  of  Victoria. 


50  A   LEGAL  MINIMUM   WAGE 

The  Anti-Sweating  League,  therefore,  determined  to 
strive  for  the  adoption  of  the  Victoria  system  in  England. 

In  1907  the  Sweated  Industries  Bill  based  on  the  Vic- 
toria wages  board  system  and  providing  for  the  establish- 
ment of  trade  boards  in  the  tailoring,  dressmaking  and 
shirtmaking  industries,  was  introduced  into  the  Englisli 
Parliament,  but  Parliament  was  not  yet  prepared  to  act 
and  satisfied  itself  with  the  appointment  of  a  select  com- 
mittee for  the  purpose  of  investigating  the  sweating  evil. 
This  committee  sent  a  special  delegate  to  Australasia  to 
investigate  the  results  of  the  two  systems  which  had  been 
adopted  there  and  also  conducted  an  investigation  into 
the  evil  of  sweating  at  home.  After  making  a  thorough 
investigation  of  the  results  of  both  systems,  Mr.  Aves, 
the  English  delegate,  was  unable  to  recommend  the  adop- 
tion of  either  system  in  England,  at  least  in  the  precise 
form  in  which  it  had  been  adopted  in  Australasia.  But  in 
spite  of  the  unfavorable  conclusions  of  Mr.  Aves,  the 
committee  relying  on  the  facts  presented  by  him  and  on 
the  results  of  its  own  investigation,  recommended  the 
application  of  the  wages  board  system  of  Victoria  to 
certain  home  industries  in  England  in  which  the  evil  of 
sweating  was  specially  prevalent.  The  members  of  the 
Anti-Sweating  League  were  not,  however,  satisfied  to 
have  legislation  confined  solely  to  home  industries.  They 
felt  that  it  was  needed  just  as  much  in  certain  industries 
carried  on  in  factories.  In  this  the  ministry  acceded  to 
the  wishes  of  the  Anti-Sweating  League.  Mr.  Asquith 
pledged  himself  not  to  confine  the  legislation  which  was 
about  to  be  introduced  exclusively  to  home  industries. 

In  1909,  the  British  ministry  determined  to  adopt  the 
Victoria  wages  board  system  as  a  remedy  for  the  evil  of 
sweating  in  certain  industries.  The  special  committee  on 
sweating  had  reported  in  1908  ' '  that  the  wages  of  a  large 
nmnber  of  people  were  so  small  as  alone  to  be  insufficient 
to  sustain  life  in  a  most  meager  manner,  even  when  the 
workers  toil  hard  for  extremely  long  hours ;  that  the  con- 


ENGLISH  TRADE  BOARD  ACT  51 

ditions  under  which  they  live  are  altogether  pitiable  and 
distressing. '  '**  The  ministry  concluded  that  such  a  condi- 
tion needed  the  intervention  of  Parliament.  This  did  not 
mean  that  the  State  was  going  to  act  in  an  arbitrary  man- 
ner, without  consulting  employers  in  the  different  trades. 
The  purpose  of  the  ministry  was  to  provide  a  remedy  for 
certain  serious  evils  which  were  becoming  a  menace  to 
the  body  politic.  For  this  purpose  it  intended  to  make 
use  of  the  good  will  of  the  better  employers,  and  to  sup- 
plement it  by  outside  representation.  The  more  consci- 
entious employers  were  to  unite  with  the  representatives 
of  the  public  to  raise  wages  and  improve  the  conditions 
of  the  sweated  workers,  and  to  prevent  unscrupulous  em- 
ployers from  taking  advantage  of  the  weakness  of  their 
workers.  Outside  representation,  with  the  cooperation 
of  the  better  employers,  it  was  hoped,  would  do  for  the 
workers  what  they  had  been  unable  to  do  for  themselves. 
In  the  beginning,  it  was  thought,  the  sweated  workers 
would  be  able  to  do  very  little  for  themselves  and  should, 
therefore,  rely  almost  altogether  on  outsiders ;  but  as  they 
experienced  the  benefits  of  beneficent  legislation,  they 
would  be  able  to  rely  more  and  more  on  their  own  efforts, 
i^hose  who  took  part  in  the  Parliamentary  debates  on 
the  Trade  Boards  Act  emphasized  very  strongly  the  influ- 
ence which  it  would  have  on  trade  unionism.  They 
thought  that  the  law  itself  should  give  a  direct  incentive 
to  the  formation  of  unions  and  that  those  charged  with 
its  administration  should  be  authorized  to  cooperate  with 
the  workers  in  the  formation  of  trade  unions.  As  unions 
were  formed  in  the  sweated  trades,  it  was  thought  that 
the  workers  would  be  better  able  to  defend  and  uphold 
their  own  interests,  that  there  would  be  a  greater  equality 
between  the  bargaining  powers  of  employers  and  em- 
ployes. When  such  a  condition  was  brought  about,  it 
would  be  no  longer  necessary  for  the  representative  of 
the  public  to  supplement  the  weakness  of  the  workers. 


^'Parliamentary  Debates,  House  of  Commons,  vol.  4,  no.  45,  p.  347. 


52  A   LEGAL  MINIMUM   WAGE 

These,  it  was  thought,  would  know  their  own  wants,  and 
would  be  able  to  formulate  their  own  demands.  Then  the 
sole  work  of  the  representatives  of  the  public  would  be  to 
establish  harmony  between  the  two  contending  interests. 
As  far  as  possible  they  would  try  to  bring  them  to  an 
agreement ;  but  where  an  agreement  was  impossible,  the 
representatives  of  the  public  would  decide  the  case  in  the 
manner  which  in  their  estimation  harmonized  best  with 
the  interests  of  both  parties  and  the  public  at  large.  Such, 
indeed,  were  the  ideas  of  all  who  took  part  in  the  Parlia- 
mentary debates  on  the  Trade  Boards  Act  in  1909. 
Throughout  the  whole  series  of  debates  not  one  dissent- 
ing voice  was  heard.  All  were  in  favor  of  the  law  for 
they  felt  that  the  evil  of  sweating  demanded  a  speedy 
remedy  and  that  the  experience  of  the  last  thirteen  years 
had  shown  that  Victoria  had  devised  the  best  and  most 
direct  remedy  for  this  evil.  All,  therefore,  concluded 
that  at  least  a  limited  trial  should  be  given  to  the  wages 
board  system  of  Victoria. 

As  applied  by  the  English  Parliament  through  the 
Trade  Boards  Act  of  1909,  the  wages  board  system  was 
applied  to  four  trades:  1)  ready-made  and  wholesale 
tailoring;  2)  paperbox  making;  3)  machine-made  lace  and 
net  finishing;  4)  certain  kinds  of  chainmaking.  The  law, 
however,  was  so  framed  as  to  enable  Parliament  to  extend 
its  application  to  other  trades  as  occasion  arose.  The 
Board  of  Trade  might  at  any  time  make  a  recommenda- 
tion technically  known  as  a  provisional  order,  for  the  ex- 
tension of  the  act  to  additional  trades,  if  they  were  satis- 
fied that  the  rate  of  wages  prevailing  in  any  branch  of 
these  trades  are  exceptionally  low  as  compared  with  that 
in  other  employments,  and  that  the  circumstances  of  the 
trades  are  such  as  to  render  the  application  of  the  act 
necessary.*^  This  recommendation  or  provisional  order 
was  to  be  laid  before  both  houses  of  Parliament  and  in 


"Trade  Boards  Act  (sec.  1)   (Subsec.  2). 


ENGLISH  TRADE  BOARD  ACT  53 

case  they  approved  of  it,  they  were  to  pass  a  provisional 
order  confirmation  act.  If,  however,  an  objection  was 
registered  by  employers  or  employes,  in  the  trades  to 
which  it  was  proposed  to  extend  the  act.  Parliament  was 
to  refer  the  matter  to  a  special  committee  or  a  joint  com- 
mittee of  both  houses,  in  order  to  find  out  whether  or  not 
the  objection  had  any  basis.  For  the  above-mentioned  four 
trades  and  such  others  as  should  be  included  by  provi- 
sional order,  the  Board  of  Trade*®  was  authorized  to 
establish  trade  boards  consisting  of  an  equal  number  of 
employers  and  employes  (representative  members)  to- 
gether with  representatives  of  the  public  (appointed 
members).  (Act,  sec.  11,  subsec.  1.)  The  representatives 
of  the  public  were  to  be  less  than  half  the  representatives 
of  the  employers  and  employes  (Act,  sec.  13,  sub.  2).  The 
representatives  of  the  employers  and  employes  were  to 
be  elected  by  both  parties  whenever  an  election  was  feasi- 
ble. When  the  Board  of  Trade  considered  that  an  election 
was  not  feasible  it  was  authorized  to  select  the  represen- 
tatives of  the  employers  and  employes  from  those  pre- 
sented by  both  parties  (Act,  sec.  11,  sub.  3).  The  chair- 
man and  secretary  were  to  be  selected  by  the  Board  of 
Trade  from  the  members  of  the  trade  board  (Act,  sec.  11, 
sub.  4). 

In  order  that  the  peculiar  needs  and  circumstances  of 
each  district  might  be  taken  into  account,  the  trade 
boards  were  authorized  to  set  up  district  trade  commit- 
tees consisting  of  an  equal  number  of  employers  and  em- 
ployes in  the  district,  together  with  at  least  one  appointed 
member  (Act,  sec.  12,  subsec.  1  and  2).  These  committees 
were  to  investigate  the  conditions  in  each  particular  dis- 
trict and  to  make  recommendations  to  the  trade  board 
for  the  fixing  of  minimum  rates  of  wages,  both  time  and 
piece  rates.    Whenever  a  district  trade  committee  deemed 


"The  British  Board  of  Trade  is  a  legal  institution  with  functions 
similar  to  our  Department  of  Commerce.  Its  president  is  a  member  of 
the  British  Cabinet.  In  Great  Britain,  the  Labor  Department  comes 
under  the  Board  of  Trade. 


54  A   LEGAL  MINIMUM   WAGE 

it  advisable,  it  miglit  establish  a  subcommittee  to  make 
recommendations  in  regard  to  minimum  piece  rates. 

It  cannot,  therefore,  be  charged  against  the  Trade 
Boards  Act  that  it  overlooks  the  opinion  of  employers  in 
fixing  minimum  rates  of  wages.  Not  only  does  it  take 
into  account  the  best  opinion  of  employers  in  general,  but 
also  the  special  needs  and  circumstances  of  each  district. 
It  was  the  aim  of  Parliament  in  passing  this  act  to  take 
into  account  the  best  opinion  of  employers  all  along  the 
line.  Parliament  believed  that  if  wages  were  raised  to 
the  standard  of  the  better  paying  employers  in  each  trade, 
the  great  purpose  of  the  law  would  be  attained.  How  far 
Parliament  was  justified  in  counting  on  the  cooperation 
of  employers  cannot  be  determined  with  any  definiteness 
as  ^'^et.  The  meager  information  which  we  possess  does 
not  at  all  justify  the  expectations  based  on  the  coopera- 
tion of  employers.  The  employers  on  the  paper-box 
board  offered  very  strong  opposition  to  the  increase  of 
wages  granted  to  the  workers  in  this  trade.  Even  after 
the  rate  had  been  fixed,  it  was  repudiated  by  the  em- 
ployers on  the  ground  that  the  board  could  not  legally  fix 
a  progressive  rate  of  wages.*^  Employers  also  offered 
vigorous  opposition  to  the  proposed  increase  for  chain- 
makers  in  1913. 

After  a  trade  board  had  been  established  in  any  of 
the  trades  scheduled  under  the  Trade  Boards  Act  of  1909, 
it  was  to  proceed  to  fix  a  minimum  rate  of  wages.*^  At 
first  the  board  was  to  confine  itself  to  the  fixing  of  mini- 
mum time  rates  of  wages  and  employers  were  to  arrange 
their  piece  rates  in  such  a  manner  as  to  enable  the  major- 
ity of  their  workers  to  earn  as  much  as  those  working 
under  time  rates.  If  any  objection  was  lodged  against 
the  piece  rates  of  employers  they  were  obliged  to  prove 
that  those  working  under  them  were  able  to  earn  as  much 


"Fifth    Annual    Report    of    the    National    Anti-Sweating    League, 
1911,  p.  8. 
"Act,  sec.  4. 


ENGLISH  TRADE  BOARD  ACT  55 

as  those  working  on  a  time  rate  basis. *^  Whenever  a 
minimum  time  rate  of  wages  could  not  be  applied  in  any- 
trade,  the  board  was  to  proceed  to  the  establishment  of  a 
minimum  piece  rate  in  that  trade. 

Before  fixing  a  minimum  rate  of  wages  in  any  trade 
the  boards  are  obliged  to  give  a  three  months'  notice  of 
their  intention  to  do  so.  This  waiting  period  was  looked 
upon  by  Parliament  as  a  period  of  education.  It  was  to 
give  an  opportunity  to  all  concerned  to  make  objections 
to  the  proposed  rates.  If  at  the  end  of  three  months  the 
trade  board  was  still  persuaded  that  the  proposed  rates 
were  fair  and  reasonable,  it  was  to  put  them  into  opera- 
tion. During  the  succeeding  six  months  the  rates  were 
to  have  a  limited  operation.  Employers  were  to  be  bound 
by  them  in  the  absence  of  a  written  contract  to  the  con- 
trary and  they  were  also  to  be  binding  on  all  employers 
doing  contract  work  for  the  government.  At  the  end  of 
six  months,  the  Board  of  Trade  was  to  issue  an  order 
making  the  rates  obligatory  unless  the  circumstances 
were  such  as  to  make  an  obligatory  order  premature 
and  undesirable,  in  which  case  they  were  to  make  an  order 
suspending  the  obligatory  operation  of  the  rate.^°  Once 
the  Board  of  Trade  has  issued  an  obligatory  order  all  em- 
ployers in  the  trade  are  bound  to  pay  the  prescribed  rate 
of  wages  under  a  penalty  of  not  less  than  £20  and  £5  for 
each  day  on  which  they  fail  to  pay  the  minimum  after 
conviction  has  taken  place. ^^ 

When  any  worker,  owing  to  infirmity  or  physical  in- 
jury, is  incapable  of  earning  the  prescribed  minimum,  the 
trade  board  is  authorized  to  make  provision  for  such  a 
worker,  either  by  fixing  a  special  piece  rate  for  him  or  by 
issuing  a  special  permit  allowing  him  to  work  for  less 
than  the  minimum. ^^ 


"Act,  sec.  8  (b). 
""Act,  sec.  5,  subsec.  2. 
"Act,  sec.  6,  subsec.  1. 
"Act,  sec  6,  subsec.  3. 


56  A   LEGAL  MINIMUM   WAGE 

The  administration  of  the  Trade  Boards  Act  was 
placed  in  the  hands  of  officials  appointed  by  the  Board  of 
Trade.  The  Board  of  Trade  was  authorized  to  appoint 
* '  such  officers  as  they  thought  fit  for  the  purpose  of  inves- 
tigating any  complaints  or  otherwise  securing  the  proper 
observance  of  the  Act. '  '^^ 

■"Act,  sec.  14. 


CHAPTER  VI 
THE  TRADE  BOARDS  ACT  IN  OPERATION 

The  Trade  Boards  Act  came  into  operation  January  1, 
1910.  At  that  time  a  board  had  been  already  established 
in  the  chain  trade  in  conformity  with  the  rules  drawn  up 
by  the  Board  of  Trade  in  1909.  The  chain  board  con- 
sisted of  fifteen  members — six  representatives  of  the  em- 
ployers, six  of  employes  and  three  outside  representa- 
tives. The  representatives  of  the  employers  and  em- 
ployes were  elected  at  public  meetings,  held  under  the 
auspices  of  a  representative  of  the  Board  of  Trade,  at 
Cradley  Heath,  and  the  outside  representatives  were 
selected  by  the  Board  of  Trade. 

In  chainmaking  the  board  had  to  deal  with  a  very 
small  and  concentrated  trade  employing  in  all  about  5,300 
workers.  Of  this  number,  1,500  were  employed  in  fac- 
tories, the  remainder  being  outworkers.  The  factory 
workers  had  a  fairly  strong  union  and  were,  consequently, 
receiving  rather  high  wages.  The  operation  of  the  trade 
board  was,  therefore,  confined  almost  exclusively  to  out- 
workers who  were  receiving,  on  the  average,  30  per  cent, 
less  wages  than  the  factory  workers.^* 

The  chain  board  fixed  minimum  rates  of  wages  for 
hand-hammered  chain — the  women's  branch  of  the  trade 
— August,  1910;  and  for  dollied  and  tommied  chain — the 
men's  branch — February,  1911.  The  minimum  time  rates 
for  adult  workers  were  2i/2<i.  (5  cents)  an  hour  where 
tools,  fuel,  and  workshop  were  provided  by  the  employer, 
and  3  l-3d.  (6  2-3  cents)  an  hour  where  these  were  pro- 
vided by  the  worker.  The  rates  fixed  for  men  varied  from 
5d.  (10  cents)  to  Id.  (14  cents)  an  hour,  according  to  the 
weight  of  the  chain,  where  tools,  shop  and  fuel  were  pro- 
vided by  the  employer;  and  from  6  2-3^?.     (13  1-3  cents) 


"Minimum  Rates  of  Wages  in  the  Chainmaking   Industry,  R.   W. 
Tawney,  p..  25. 


58  A    LEGAL  MINIMUM   WAGE 

to  9  1-3^,  (18  2-3  cents),  where  these  were  provided  by  the 
employes.^^ 

In  chainmaking,  however,  the  fixing  of  minimum  time 
rates  was  a  matter  of  relatively  small  importance  as  the 
majority  of  the  workers  in  the  trade  are  piece  workers. 
The  principal  object  which  the  board  had  in  view  in  fix- 
ing the  minimum  time  rates  was  to  afford  it  a  basis  on 
which  to  fix  minimum  piece  rates.  An  attempt  was  made 
to  so  arrange  the  piece  rates  as  to  enable  the  workers  to 
earn  the  same  hourly  wages  as  time-rate  workers.  This 
was  a  rather  intricate  process,  for  it  necessitated  the 
fixing  of  different  rates  according  to  the  different  sizes 
of  chain. 

In  1912,  the  workers  began  to  agitate  for  an  increase 
of  the  minimum  granted  by  the  board  determination. 
They  demanded  that  the  time  rates  for  hand-hammered 
chain  be  increased  from  2i/^  to  3d.  (5  to  6  cents)  an  hour, 
and  that  a  similar  increase  be  granted  in  the  rates  for 
dollied  and  tommied  chain.  The  employers'  representa- 
tives on  the  board  strongly  opposed  this  demand  of  the 
workers.  A  compromise  was  suggested  by  the  appointed 
members  on  the  board,  increasing  the  present  rate  to 
2%d.  (514  cents)  instead  of  3^.  (6  cents)  as  demanded  by 
the  workers.  When  the  compromise  was  proposed,  the 
representatives  of  the  employers  withdrew  from  the  meet- 
ing of  the  board,  but  in  spite  of  their  opposition  it  was 
finally  adopted.  On  January  19,  1914,  the  board  an- 
nounced that  it  had  varied  the  previous  determination  in 
the  chain  trade.  The  new  determination  since  ratified  by 
the  Board  of  Trade  has  fixed  the  minimum  rates  for 
women  workers  at  2%d.  (51/2  cents)  an  hour  when  the  em- 
ployer provides  workshop,  tools  and  fuel,  and  3  2-3^. 
(7  1-3  cents)  when  he  does  not.  The  time  rates  fixed  for 
men  workers  varies  from  5d.  (10  cents)  to  7  7-10^?.  (15  2-5 
cents)  according  to  the  diameter  of  the  iron  used,  when 


"Tawney,  op.  cit.,  pp.  39-40. 


THE  TRADE  BOARD  S  ACT  IN  OPERATION  59 

the  employer  provides  workshop,  tools  and  fuel,  and 
6  2-3^.  (13  1-3  cents)  to  10  4-15^.  (20  8-15  cents)  when  he 
does  not.  The  advance  on  the  old  piece  rates  granted  by 
the  new  determination  amounts  to  about  10  per  cent.^*^ 

A  comparison  between  the  wages  of  men  chainmakers 
in  1911  and  1913  shows  that  the  increase  brought  about  by 
the  board  determination  was  quite  considerable.  In  1911 
the  majority  of  men  chainmakers  were  receiving  between 
135.  ($3.12)  and  145.  ($3.36)  a  week,  whereas,  in  1913,  the 
majority  were  receiving  between  20s.  ($4.86)  and  225. 
($5.34)  a  week.  (Tawney,  op.  cit.,  p.  92.)  It  is  estimated 
that  in  1910,  64  per  cent,  of  the  women  workers  earned 
less  than  55.  ($1.20)  a  week,  and  only  14.3  per  cent,  over 
75.  ($1.68) ;  whereas  in  1913  only  13.8  per  cent,  were  re- 
ceiving under  55.  ($1.20)  a  week,  and  66  per  cent.,  over  75. 
($1.68). 

In  the  chain  trade,  the  problem  of  learners  was  not 
such  a  large  one  as  in  the  other  trades.  Nevertheless  the 
method  of  dealing  with  it  adopted  by  the  chain  board 
contains  many  useful  suggestions  for  the  wage  boards  in 
this  country.  The  rules  of  the  board  prescribe  that  every 
learner  must  have  a  certificate  signed  by  the  secretary  of 
the  trade  boards.  Every  employer,  therefore,  who 
wishes  to  take  on  an  additional  learner,  must  make  a 
special  application  to  the  trade  board  in  which  he  must 
set  forth  the  opportunities  of  learning  the  trade  which  he 
intends  to  afford  the  learner,  and  also  the  proportion  of 
learners  to  experienced  workers  in  his  shop.  The  chain 
board  has  also  specified  the  time  to  be  required  in  learn- 
ing the  trade  as  well  as  the  wages  to  be  paid  to  learners. 
Two  years  has  been  specified  as  the  time  necessary  to 
learn  the  trade.  The  learner  in  hand-hammered  chain 
must  be  paid  45.  (96  cents)  a  week  during  the  first  six 
months'  period  of  employment;  55.  6d.  ($1.32)  during  the 
second  six  months'  period;  80  per  cent,  of  the  minimum 
piece  rates  during  the  third  six  months'  period;  and  90 


"Tawney,  op.  cit,  p.  44.    Labor  Gazette,  February,  1914,  p.  48. 


60  A   LEGAL  MINIMUM   WAGE 

per  cent,  of  the  minimum  piece  rates  during  the  fourth 
six  months '  period.  A  similar  graduated  scale  of  wages 
was  drawn  up  for  learners  in  dollied  and  tommied  chain" 
This  grading  of  the  minimum  rates  of  the  workers  accord- 
ing to  their  experience  is  a  characteristic  feature  of  the 
determinations  of  the  English  and  Australian  boards,  the 
purpose  being  in  all  instances  the  same,  namely,  to  avoid 
the  danger  of  displacement  through  a  sudden  change  in 
the  wage  scale. 

The  Trade  Boards  Act  has  made  special  provision 
for  those  who,  by  reason  of  age  or  infimity,  are  unable  to 
earn  the  prescribed  minimum.  It  has  authorized  the 
board  to  provide  for  them  by  allowing  them  to  work  on  a 
piece-rate  basis,  or  where  this  is  impossible,  by  giving 
them  special  permits  to  work  for  less  than  the  prescribed 
minimum.  (Trade  Boards  Act,  sec.  6,  subsec.  3.)  In  the 
chain  trade  this  difficulty  has  been  solved  by  the  special 
piece  rates.  The  board  has  not,  therefore,  found  it  neces- 
sary to  issue  any  special  permits  to  chain  workers  allow- 
ing them  to  work  for  less  than  the  minimum. 

(Tt  is  admitted  by  all  who  have  looked  into  the  matter, 
whether  from  the  standpoint  of  employer,  employe  or 
social  worker,  that  the  increase  of  wages  granted  by  the 
board  has  brought  about  remarkable  changes  in  the  lives 
of  the  chainworkers  at  Cradley  Heath.  "The  women 
seem  different  beings  from  the  inert  and  sunken  people 
who  attended  meetings  in  pre-board  times  and  the  propri- 
etors of  the  shops  tell  how  their  sales  have  expanded 
under  the  genial  influence  of  the  new  conditions,  imper- 
fect though  they  may  be  admitted  to  be."^^  Increase  of 
wages  has  meant  better  food,  greater  happiness  and  effi- 
ciency on  the  side  of  the  workers.  It  seems  to  have  raised 
them  to  a  new  plane  where  they  are  capable  of  using  their 
united  efforts  to  help  themselves.  So  much  is  evident 
from  the  great  progress  of  trade  unionism  among  the 


"'Tawney,  op.  cit.,  pp.  51,  52. 

"^Sixth  Report  of  the  National  Anti-Sweating  League,  1912,  p.  5. 


THE  TRADE  BOARDS  ACT  IN  OPERATION  61 

chainworkers  during  the  past  thirty  years.  The  chain- 
makers  working  in  factories  have  always  had  fairly 
strong  unions  and  have,  therefore,  been  able  to  maintain 
fairly  high  rates  of  wages.  The  other  two  unions  at 
Cradley,  namely,  the  men  outworkers '  union  and  the  local 
branch  of  the  Women's  Federation,  had  been  very  weak 
before  the  establiskment  of  the  board.  In  prosperous 
times,  they  were  able  to  enforce  a  standard  rate  of  pay, 
but  in  seasons  of  depression  the  workers  again  underbid 
one  another,  thereby  enabling  the  employers  to  cut  down 
wages.  Since  1909,  the  men  outworkers'  union  and  the 
local  branch  of  the  Women 's  Federation  have  gained  con- 
siderably. At  present  60  per  cent,  of  the  women  and  70 
per  cent,  of  the  men  eligible  for  trade  union  membership, 
belong  to  these  two  unions.  In  1911,  the  men's  union  was 
able  to  obtain  by  collective  bargaining  an  increase  of  10 
per  cent,  on  the  board  determinations.^^ 

Another  highly  centralized  trade  included  under  the 
provisions  of  the  Trade  Boards  Act,  was  the  lace  trade 
at  Nottingham.  Here  the  board  had  to  deal  with  8,000 
women  workers  who  were  as  much  victimized  by  the  in- 
trigues of  middlewomen  as  the  chainworkers  at  Cradley 
Heath.  The  board  in  this  trade  was  established  May  6, 
1910.  Unlike  the  chainworkers,  those  engaged  in  the  lace 
trade  were  unable  to  elect  their  own  representatives  on 
the  board.  The  Board  of  Trade,  therefore,  selected  all 
the  representative  members — the  representative  mem- 
bers of  employers  and  employes.  The  trade  board  fixed 
2%d.  (51/2  cents)  an  hour  for  all  workers  other  than 
learners  engaged  in  the  lace  trade  and  specified  that  this 
rate  was  to  be  increased  to  3d.  (6  cents)  an  hour  inside  of 
one  year.  The  2%d.  an  hour  rate  became  effective 
February,  1912. 

■  In  the  lace  trade,  the  board  has  met  with  a  smaller  de- 
gree of  success  than  in  any  other  trades  in  which  boards 

"Tawney.-op.  cit.,  98. 


62  A   LEGAL  MINIMUM   WAGE 

liave  been  established.  This  has  been  due  -undoubtedly  to 
the  scarcity  and  irregularity  of  work  in  the  trade.  When 
there  is  very  little  work  to  do  and  a  large  number  of  peo- 
ple to  do  it,  the  workers  will  be  tempted  to  accept  work  at 
any  price.  For  this  reason  it  has  been  difficult  to  prevent 
the  lace  workers  from  evading  the  board  determinations.^" 
In  spite  of  these  difficulties,  however,  the  present  condi- 
tions in  the  lace  trade  are  a  considerable  improvement  on 
those  that  existed  previous  to  the  board  determination. 
The  most  poorly  j^aid  workers  have  received  an  increase 
of  33  1-3  per  cent,  on  their  old  rates. ^'^  The  improvement 
in  the  piece  rates  is  indicated  by  the  direct  transfer  to 
the  workers  of  price  lists  formerly  paid  to  middlewomen. 
The  profits  of  which  the  middlewomen  were  deprived  have 
gone  to  increase  the  wages  of  the  workers.  Another  hope- 
ful sign  of  the  improved  conditions  at  Nottingham  has 
been  the  advance  of  the  trade  union  movement  among  the 
lace  workers  since  the  formation  of  the  trade  board. 
The  local  branch  of  the  National  Women's  Federation 
had  2,000  members  on  its  books  in  1912.  As  at  Cradley 
Heath,  the  union  at  Nottingham  will  be  of  the  greatest  as- 
sistance to  the  officers  of  the  Board  of  Trade  in  detecting 
violations  of  the  trade  board  determinations.^^ 

As  compared  with  chain  and  lace-making  the  paper- 
box  trade  which  is  the  third  trade  scheduled  under  the 
Trade  Boards  Act  is  very  large  and  extensive.  It  is  esti- 
mated that  about  25,000  persons  are  engaged  in  the  manu- 
facture of  paper  boxes  in  Great  Britain,  9,000  of  whom 
are  women.  April  27,  1910,  a  board  was  created  in  this 
trade  consisting  of  thirty-five  members — thirty-two  rep- 
resentative members  and  three  appointed  members.  The 
representatives  of  the  employers  were  elected  and  the 
representatives  of  the  employes  selected  by  the  Board  of 
Trade  from  those  presented  by  the  employes.    The  great 

""Sixth  Report  of  the  National  Anti-Sweating  League,  1912,  p.  6. 
"Fifth  Report  of  the  National  Anti-Sweating  League,  p.  7. 
«=Sixth    Annual    Report    of    the    National    Anti-Sweating    League, 
1912,  p.  7. 


THE  TRADE  BOARDS  ACT  IN  OPERATION  63 

size  of  the  paper  box  trade  and  its  diffusion  over  the 
whole  country  made  it  impossible  for  one  board  to  deal 
with  it  satisfactorily.  The  paper  box  board,  therefore, 
delegated  a  number  of  its  powers  to  district  committees 
provided  for  by  the  Trade  Boards  Act.  Nine  of  these  dis- 
trict committees  were  created  by  the  board  in  different 
parts  of  the  country. 

After  a  protracted  struggle  lasting  over  several 
months,  the  members  of  the  paper  box  board  finally 
agreed  on  a  progressive  rate  of  wages,  beginning  with 
2^4 (i,  (514  cents)  an  hour  and  rising  to  3i4<^.  (61/0  cents) 
an  hour  in  1913,  but  the  agreement  was  shortly  after- 
wards repudiated  by  the  employers  on  the  grounds  that 
the  board  had  no  power  to  fix  a  progressive  rate  of  wages. 
Later  a  new  rate  of  3d.  (6  cents)  an  hour,  yielding  13,9. 
($3.12)  a  week,  was  fixed  by  the  board.  As  the  em- 
ployers' representatives  stated  that  about  10,000  workers 
were  receiving  less  than  IO5.  ($2.40)  a  week  previous  to 
the  board  determinations,  the  advance  for  the  poorly  paid 
workers  will  be  quite  considerable.*'^ 

The  men  in  the  paper  box  trade  were  organized  previ- 
ously to  the  formation  of  the  board,  but  their  union  was 
not  sufficiently  strong  to  maintain  any  standard  rate 
of  wages.  When  the  board  began  its  sessions,  the  rep- 
resentatives of  the  men  demanded  7d.  (14  cents)  an 
hour.  The  representatives  of  the  employers  refused  to 
pay  them  more  than  5d.  (10  cents)  an  hour.  After  some 
time,  both  sides  compromised  on  6d.  (12  cents)  an  hour 
or  265.  ($6.30)  a  week.  This  rate  gave  a  considerable  in- 
crease to  the  poorly  paid  men  workers  in  the  trade.  Prior 
to  the  board  determination,  25  per  cent,  of  the  adult  male 
workers  in  the  paper  box  trade  were  receiving  less  than 
255.  ($3.06)  a  week." 


''Fifth  Annual  Report  of  the  National  Anti-Sweating  League,  1911, 
p. 8. 

"Seventh  Annual  Report  of  the  National  Anti-Sweating  League,  p.  10. 


64  A   LEGAL  MINIMUM   WAGE 

One  of  the  best  services  of  the  trade  boards  has  been 
to  free  the  workers  from  the  obligation  of  paying  for 
the  sundries  necessary  in  their  trades.  The  paper  box 
workers  have  been  freed  from  the  obligation  of  paying 
for  paste  and  glue,  and  the  tailors,  for  cotton  and  needles. 
This  is  no  small  matter  as  the  home  worker  in  the  paper 
box  trade,  for  instance,  had  to  spend  as  much  as  Is.  6d. 
(36  cents)  a  week  for  glue  in  busy  times.^^ 

The  tailoring  trade  is  the  largest  and  most  complicated 
of  the  four  scheduled  trades.  This  trade  employs  in  all 
about  200,000  workers  and  is  spread  over  an  area  too 
great  to  be  covered  by  any  single  board.  It  is  carried  on 
in  large  cities  as  well  as  in  remote  country  hamlets.  It 
employs  workers  in  large  factories  at  fairly  reasonable 
wages  and  under  fairly  good  conditions ;  and  in  squalid 
homes  in  the  London  slums  at  miserably  low  wages.  By 
reason  of  the  large  size  of  the  tailoring  trade  and  the 
wide  extent  of  territory  which  it  covered,  the  trade 
board  thought  it  wise  to  deal  only  with  one  section  of  it 
at  first.  It,  therefore,  limited  the  sphere  of  the  trade 
board  to  the  making  of  men's  garments. ^^ 

The  trade  board  in  the  tailoring  trade,  which  was 
created  January  25,  1910,  consisted  of  twenty-nine  mem- 
bers— thirteen  representatives  of  the  employers  selected 
by  the  Board  of  Trade  from  the  names  presented  by  em- 
ployers, and  thirteen  representatives  of  the  employes 
also  selected  by  the  Board  of  Trade  from  the  names  pre- 
sented by  the  employes;  and  three  appointed  members. 
The  first  thing  done  by  the  tailoring  board  was  to  set  up 
district  committees,  seven  in  number,  in  the  various  cen- 
ters in  which  the  tailoring  trade  was  carried  on.  These 
committees  were  to  advise  the  trade  board  on  local  con- 
ditions and  assist  it  in  determining  minimum  rates  of 
wages."    The  tailoring  board,  like  the  paper  box  board, 


"Tifth  Annual  Report  of  the  National  Anti-Sweating  League,  p.  8. 
""Fifth  Report  of  the  National  Anti-Sweating  League,  1911,  p.  8. 
"Memoranda  in  reference  to  the  working  of  the  Trade  Boards  Act, 
1913,  p.  3. 


THE  TRADE  BOARDS  ACT  IN  OPERATION  65 

has  fixed  a  very  low  flat  rate  of  wages  applicable  in  all 
parts  of  the  country  in  home  work  as  well  as  in  factory 
work.  The  rate  fixed  for  adult  female  workers  was  3^/4(i. 
(61/2  cents)  an  hour,  yielding  135.  lOyod.  ($3.33)  a  week 
(51  hours).  The  rate  at  first  proposed  by  the  board 
was  31/26?.  (7  cents)  an  hour,  which  would  have  yielded 
155.  ($3.60)  a  week,  this  being  the  least  sum  considered 
necessary  to  supply  the  worker  with  the  minimum  re- 
quirements of  a  decent  life."'®  The  board,  however,  was 
compelled  to  modify  its  proposal  by  reason  of  the  organ- 
ized opposition  of  the  Wholesale  Clothiers  Federation 
and  to  fix  the  minimum  at  31/4^^.  (61/2  cents)  an  hour.  The 
tailoring  board  also  fixed  minimum  rates  for  learners  in 
the  trade.  Female  learners  beginning  at  14  and  under 
15  years  of  age  are  to  be  paid  a  rate  varying  from  35. 
(72  cents)  per  week  during  the  first  six  months'  period  of 
employment,  to  125.  6d.  ($3.06)  during  the  eiglith  six 
months'  period.  Different  rates  are  fixed  for  learners 
beginning  at  15  and  under  16,  at  16  and  under  21,  and  21 
and  over. 

f  How  this  admittedly  low  wage  compares  with  the 
wa^es  of  women  workers  previously  to  the  board  determi- 
nation, it  is  very  difficult  to  say.  We  have  no  statistics  in 
regard  to  the  wages  of  women  workers  previously  to  the 
board  determination.  From  what  we  know  of  its  influ- 
ence on  the  wages  of  factory  workers,  we  may,  however, 
conclude  that  it  made  a  considerable  advance  in  the  wages 
of  home  workers.  According  to  the  wages  and  hours  in- 
quiry of  the  Board  of  Trade  in  1906,  10  per  cent,  of  the 
adult  female  workers  in  factories  were  receiving  less  than 
85.  ($1.92)  a  week,  and  70  per  cent,  under  155.  ($3.60)  a 
week."^  From  the  fact  that  the  determination  made  such 
a  noticeable  increase  in  the  wages  of  about  half  of  the 
most  poorly  paid  factory  workers,  we  may  conclude  that 
it  had  a  similar  effect  on  the  wages  of  home  workers.  The 


"^Sixth  Report  of  the  National  Anti-Sweating  League,  1912,  p.  8. 
"Sixth  Annual  Report  of  the  National  Anti-Sweating  League,  p.  7. 


66  A   LEGAL  MINIMUM   WAGE 

tailoring  board  has  fixed  the  minimum  wage  for  adult 
male  workers  in  the  tailoring  trade  at  6d.  an  hour,  which 
is  equal  to  26^.  a  week.  This  minimum,  while  admittedly 
very  low,  must  have  made  a  considerable  increase  in  the 
wages  of  a  large  number  of  tailors.  The  figures  given  by 
the  Board  of  Trade  for  1906  show  that  25  per  cent,  of  the 
adult  males  in  the  tailoring  trade  earned  less  than  255. 
($6.00)  a  week.  Even  admitting  a  change  for  the  better 
between  that  year  and  1911,  still  it  is  probably  true  that  a 
fairly  large  percentage  of  the  tailors  were  receiving 
under  25s.  ($6.00)  a  week  in  the  latter  year,  when  the 
board  fixed  the  minimum  at  26s.  ($6.24). 

In  addition  to  boards  established  in  the  four  sched- 
uled trades  in  England,  two  boards  have  been  established 
in  Ireland — one  in  the  paper-box-making  trade  and  one  in 
the  tailoring  trade.  Both  boards  have  already  fixed  mini- 
mum time  rates  of  wages  for  workers  engaged  in  these 
two  trades.  The  rates  fixed  for  workers  in  the  paper-box 
trade  are  6d.  (12  cents)  an  hour  for  adult  male  workers, 
other  than  learners,  and  2%d.  (5i/^  cents)  an  hour  for 
adult  female  workers,  other  than  learners.  These  rates, 
although  considerably  lower  than  those  fixed  for  the  same 
trades  in  England,  still  make  a  noticeable  advance  on  the 
wages  previously  paid.  On  account  of  the  instability  of 
the  industries  in  Ireland  it  was  necessary  for  the  board 
to  proceed  very  slowly  and  cautiously  and  to  begin  with 
fixing  a  rather  low  minimum  rate  of  wages. ^° 

The  penalties  which  the  law  attaches  to  the  violation 
of  the  trade  board  determinations  are  rather  severe.  Any 
employer  failing  to  pay  his  workers  the  minimum  fixed 
by  the  board,  is  liable  to  a  fine  of  not  more  than  £20 
($97.20  for  each  offense,  and  not  less  than  £5  ($24.30)  for 
each  day  on  which  the  offense  is  coipmitted  after  convic- 
tion has  taken  place.  Up  to  January  1,  1913,  only  four 
prosecutions  had  taken  place  for  the  violation  of  the 
board  determinations.    The  first  prosecution  was  that  of 


"Seventh  Annual  Report  of  the  National  Anti-Sweating  League,  p.  S. 


THE  TRADE  BOARDS  ACT  IN  OPERATION  67 

an  employer  in  the  chain  trade  for  failure  to  pay  the  mini- 
mum rate  to  three  workers.  The  court  imposed  fines  in 
this  case,  amounting  to  £15  ($72.90),  with  £9  95.  ($45.90) 
costs.  The  employer  was  also  ordered  to  pay  the  workers 
arrears  of  wages  amounting  to  £7  155.  lOd.  ($37.75).  The 
second  prosecution  was  that  of  a  Nottingham  middle- 
woman,  who  was  fined  £1  ($4.86)  with  £1  I5.  ($5.10)  as 
costs,  for  disregarding  the  determination  of  the  lace 
board.  The  third  prosecution  was  that  of  a  box  manu- 
facturer in  East  London  who  was  fined  £3  35.  ($15.30) 
with  55.  ($1.20)  costs  and  ordered  to  pay  the  sum  of  75. 
($4.08)  to  the  worker  as  arrears  of  wages.  The  fourth 
prosecution  was  that  of  a  man  and  his  wife  who  were 
carrying  on  the  business  of  subcontractors  in  the  lace 
trade,  for  interfering  with  the  work  of  an  investigating 
officer.  In  this  case  the  magistrates  did  not  think  it  wise 
to  impose  a  hea^^'  fine  on  account  of  the  poverty  of  the 
defendants.  A  small  fine  was,  therefore,  imposed  on  the 
man,  and  his  wife  was  dismissed  with  a  caution." 

At  first  Parliament  applied  minimum  wage  legisla- 
tion to  four  trades  in  which  there  was  a  crying  need  of 
reform  of  some  kind.  The  results  of  the  legislation  in 
these  four  trades  were  carefully  noted.  After  seeing 
these  results.  Parliament  concluded  that  the  experiment 
might  be  safely  extended  to  other  trades.  A  provisional 
order  was,  therefore,  introduced  into  Parliament  May  1, 
1913,  which  met  with  the  unanimous  approval  of  both 
houses,  extending  the  application  of  the  Trade  Boards 
Act  to  four  additional  trades.^^    These  four  trades  were 


"Memoranda  in  reference  to  the  Working  of  tlie  Trade  Boards  Act, 
May  27,  1913.  p.  7. 

"It  was  the  intention  of  the  Board  of  Trade  that  the  application  of 
the  Trade  Boards  Act  should  be  extended  by  provisional  order  to  five 
additional  trades  in  1913.  In  regard  to  the  extension  of  the  provisional 
order  to  four  of  these  trades,  namely  sugar  confectionery  and  food 
preserving,  shirtmaking,  hollowware  making  and  linen  embroidery, 
there  was  no  opposition,  but  in  regard  to  the  fifth  trade,  namely,  laun- 
dering there  was  considerable  opposition.  The  National  Association  of 
Laundry  Employers  petitioned  Parliament  against  the  extension  of  the 
act  to  their  industry.    Now  the  Trade  Boards  Act  provides  that  when 


DO  A   LEGAL  MINIMUM   WAGE 

sugar  confectionery  and  food  preserving,  shirtmaking, 
hollowware  making  and  linen  embroidery.  The  inclusion 
of  these  four  trades  almost  doubled  the  number  of  work- 
ers affected  by  the  Trade  Boards  Act.  It  is  estimated 
that  about  200,000  workers  are  affected  by  the  determina- 
tions of  the  boards  already  in  existence  and  that  150,000 
additional  workers  will  be  affected  by  the  boards  to  be 
established  under  the  new  provisional  order. ^^ 

-  The  fact  that  the  English  government  after  three 
years '  experience  of  the  working  of  minimum  wage  legis- 
lation, determined  to  extend  its  operation  over  a  wider 
field  is  a  very  strong  proof  of  the  feasibility  of  this  kind 
of  legislation.  When  minimum  wage  legislation  was  first 
proposed  in  England  in  1907-08,  there  was  a  tendency  to 
exaggerate  its  defects  and  difficulties  by  those  who  stud- 
ied it  from  the  viewpoint  of  theoretical  political  econ- 
omy, and  also  from  the  viewpoint  of  the  practical  experi- 
ence of  the  Australasian  colonies.  The  economists  were 
writing  about  the  very  serious  economic  objections  to 
minimum  wage  legislation.  Students  of  Australasian 
legislation  thought  that  the  Australasian  experience  was 


such  a  petition  is  presented  to  Parliament  it  may  refer  ttie  matter  to  a 
select  committee;  or  to  a  joint  committee  of  the  two  houses.  In  this 
case,  Parliament  referred  the  matter  to  a  select  committee  which  dis- 
approved of  the  application  of  the  proposed  order  to  laundering.  The 
committee  concluded  that  in  as  much  as  the  order  referred  to  calender- 
ing and  machine-ironing  steam  laundries  to  the  exclusion  of  laundries 
employing  other  kinds  of  power,  it  was  discrimatory.  The  Board  of 
Trade,  thereupon  complied  with  the  suggestion  of  the  select  committee, 
by  eliminating  all  specific  reference  to  steam  laundries.  In  1914, 
therefore,  it  asked  Parliament  to  extend  the  application  of  the  act  to 
calendering  and  machine-ironing  in  all  laundries,  no  matter  what  kind 
of  power  they  used.  The  matter  was  again  referred  to  a  select  com- 
mittee which  failed  to  approve  of  the  order  on  the  grounds  that  the 
evidence  presented  to  them  in  its  favor  was  inconclusive.  The  com- 
mittee, however,  suggested  that  the  Board  of  Trade  should  invite  the 
cooperation  of  trade  organization  of  employers  and  employes  with 
a  view  to  obtaining  the  fullest  information  in  regard  to  wages  and  other 
conditions  of  labor  in  the  whole  laundry  trade.  They  further  suggested 
that  any  order  relating  to  the  laundry  trade  that  may  hereafter  be 
applied,  should,  if  possible,  be  of  somewhat  wider  application.  Special 
Report  of  the  Select  Committee  on  the  Trade  Boards  Act  Provisional 
Order  Bill. 

"Seventh  annual  report  of  National  Anti-Sweating  League,  1913,  p.  2. 
Memoranda  in  reference  to  the  working  of  the  Trade  Boards  Act, 
ordered  by  House  of  Commons,  May  27,  1913,  p.  7. 


THE  TRADE  BOARDS  ACT  IN  OPERATION  69 

not  conclusive  and  that  the  Australasian  experiment  did 
not  establish  the  general  feasibility  of  minimum  wage 
legislation.  With  the  experience  of  three  or  four  years 
of  the  working  of  the  minimum  wage  legislation,  it  has 
been  discovered  that  the  difficulties  conjured  up  in  1907-08 
were  either  unreal  or  exaggerated. 


CHAPTER  VII 
THE  COAL  MINES  (MINIMUM  WAGE)  ACT 

The  Coal  Mines  (Minimuni  Wage)  Act,  1912,  was  due 
to  the  great  strike  that  took  place  in  the  British  coal 
mines  in  March,  1912.  This  strike  which  involved  about 
710,000  miners  practically  brought  to  a  standstill  a  large 
part  of  the  industries  of  the  nation.  Even  before  the 
strike  was  declared  and  especially  before  it  had  been 
under  way  for  many  days,  the  government  realized  that 
it  was  fraught  with  very  grave  consequences.  The  min- 
istry, therefore,  strained  every  nerve  to  avert  the  strike 
and  after  it  had  been  declared,  it  used  every  means  in  its 
power  to  bring  the  parties  to  an  agreement.  It  was  only 
after  it  had  failed  to  bring  them  to  an  agreement  and  to 
induce  them  to  resort  to  conciliatory  measures  that  it 
was  forced  to  have  recourse  to  legislation.  The  circum- 
stances which  led  to  the  Coal  Mines  Act  and  the  purpose 
of  the  act  were,  therefore,  altogether  different  from  the 
circumstances  and  the  purpose  of  the  Trade  Boards  Act. 
The  Coal  Mines  Act  was  passed  to  put  an  end  to  a  great 
industrial  conflict;  it  was  a  means  devised  by  English 
society  to  protect  itself  against  industrial  conflicts.  The 
Trade  Boards  Act  on  the  other  hand  was  passed  to  pro- 
tect the  weak  against  the  strong.  It  was  a  means  de- 
vised by  society  to  give  to  the  weaker  members  of  the 
laboring  group  what  they  had  been  unable  to  attain  by 
their  own  efforts. 

The  great  coal  mines  strike  was  really  the  culmination 
of  a  national  movement  for  a  minimum  wage  for  all  men 
and  boys  working  underground  in  the  mines  of  Great 
Britain.  This  demand  for  a  national  minimum  wage  was 
not  due  to  any  pressing  necessity  for  a  general  increase  of 
the  wages  of  miners  throughout  the  United  Kingdom. 
Before  the  fall  of  1911,  the  miners  as  a  whole  were  satis- 
fied with  their  wages  and  they  were  satisfied  with  collect- 

70 


THE   COAL  MINES    (MINIMUM   WAGe)    ACT  71 

ive  bargaining  as  a  means  of  obtaining  an  increase  when- 
even  an  increase  was  necessary.  The  difficulties  which  led 
to  the  demand  for  a  national  minimum  wage  and  to  the 
great  national  strike  as  a  means  of  obtaining  it,  may  be 
traced  to  a  dispute  in  the  Cambrian  mines  in  South  Wales 
in  1911  for  Which  the  operators  and  miners  had  not  been 
able  to  find  a  solution.^*  At  that  time  the  Cambrian  Com- 
pany began  to  work  on  a  new  seam,  and  gave  notice  to 
the  workers  that  they  wished  to  have  a  tonnage  price 
fixed  for  the  working  of  this  seam.  The  representatives 
of  the  employers  and  employes  not  being  able  to  agree  on 
a  scale  of  piece  rates,  the  matter  was  referred  to  a  con- 
ciliation board,  which  also  failed  to  arrive  at  any  decision. 
After  conciliation  had  failed,  a  strike  was  called  of  the 
men  working  on  the  new  seam  and  with  that  all  the  miners 
in  the  Cambrian  collieries  were  locked  out.^^ 

The  difficulty  which  led  to  the  Cambrian  dispute  was 
only  one  of  the  many  difficulties  arising  from  time  to 
time  in  regard  to  the  question  of  abnormal  places  in  the 
coal  mines  of  Great  Britain.  When  the  miner  struck 
abnormal  places,  that  is,  when  he  met  a  hard  vein  or  water 
or  had  to  devote  too  much  time  to  fixing  the  roof  of  the 
mine,  there  was  really  no  proportion  between  the  amount 
of  work  done  and  the  wages  received.  In  such  instances 
the  miner  might  work  very  hard  and  receive  a  very  low 
wage.  The  usual  method  of  solving  these  difficulties 
created  by  abnormal  places  was  through  an  allowance 
system,  the  amount  of  the  allowance  being  agreed  upon 
by  a  local  committee  of  employers  and  employes.^®  This 
method,  however,  did  not  finally  solve  the  difficulty,  as  the 
employers  and  employes  could  not  always  agree  upon 
what  constituted  an  abnormal  place  or  the  amount  of 
work  to  be  required  of  the  miner  in  such  a  place. 


"Evans,  Coal  Strike  in  South  Wales,  1910-11,  pp.  214-215. 
■"London  Quarterly  Review,  1912,  vol.  V,  p.  554. 
"Evans,  -op.  cit.,  p.  215. 


72  A   LEGAL   MINIMUM    WAGE 

The  more  conservative  miners  in  the  Cambrian  Col- 
lieries and  throughout  South  Wales  would  have  been  able 
to  come  to  an  agreement  with  their  employers  on  the  ques- 
tion of  abnormal  places.  Before  1910  they  had  been  able 
to  settle  these  questions  by  a  system  of  conciliation,  but, 
by  this  time,  the  power  of  the  old  conservatives  among 
the  miners  had  waned  considerably.  A  strong  radical 
wing  had  risen  to  power  and  this  radical  wing  dominated 
the  policies  of  South  Wales  in  1910.  The  members  of  this 
wing  were  strongly  socialistic  in  aim  and  profession. 
For  the  old  methods  of  collective  bargaining  they  cared 
little.  What  they  desired  and  strove  for  was  a  legal 
minimum  wage  for  all  the  workers  underground,  inde- 
pendently of  the  amount  of  work  done,  or  the  place  in 
which  it  was  done." 

The  Cambrian  strike  was  the  first  movement  of  the 
South  Wales  miners  towards  the  enforcement  of  their  de- 
mand for  a  legal  minimum  wage.  The  strike  did  not  at- 
tain its  immediate  purpose  but  nevertheless  it  contributed 
very  materially  towards  popularizing  the  demand  of  the 
Welsh  miners.  Henceforth  the  socialist  party  of  South 
Wales  bent  all  its  efforts  towards  winning  the  support  of 
the  British  Federation  of  Miners.  It  was  persuaded  that 
so  long  as  the  demand  for  a  minimum  wage  remained  a 
purely  local  one,  it  was  doomed  to  failure,  but  that  once  it 
assumed  national  proportions  its  success  was  assured. 
By  October,  1911,  the  Radicals  of  South  Wales  succeeded 
in  winning  the  British  Federation  of  Miners  over  to  its 
side.  At  that  time  a  national  conference  was  held  at 
Southport  at  which  the  following  resolution  in  favor  of  a 
district  minimum  wage,  without  any  reference  to  the 
working  place  being  abnormal,  was  passed :  'Hliat  the  Fed- 
eration take  immediate  steps  to  secure  an  individual  dis- 
trict minimum  wage  for  all  men  and  boys  working  in  the 
mines  without  any  reference  to  the  working  places  being 
abnormal. '  "^ 


"Evans  Coal  Strike,  South  Wales,  1910-11,  p.  2. 
"Board  of  Trade  Labor  Gazette,  March,  1912,  p.  82. 


THE   COAL   MINES    (MINIMUM    WAGe)    ACT  7S 

The  demand  for  a  legal  minimum  wage  for  miners  had 
by  this  time  assumed  national  proportions.  But  before 
national  action  was  taken  on  the  matter  the  employers  in 
each  district  were  to  be  given  a  chance  of  complying  witii 
the  demands  of  their  workers,  and  for  this  purpose  dis- 
trict conferences  were  to  be  held  all  over  the  country." 
On  November  14,  the  delegates  from  each  district  were 
to  make  a  report  to  the  Federation  on  the  results  of  these 
conferences  and  on  that  date  the  question  of  national 
action  by  all  the  miners  in  Great  Britain  for  a  legal  mini- 
mum wage  in  each  district  was  to  be  discussed.  The  na- 
tional conference,  however,  held  on  that  date,  adjourned 
without  coming  to  any  conclusion,  as  negotiations  were 
still  in  progress  in  many  districts ;  and  it  was  accordingly 
decided  to  hold  another  national  conference  on  December 
20,  at  which  the  question  would  be  brought  up  again.  As 
the  reports  from  the  district  committees  were  mostly  un- 
favorable, it  was  resolved,  at  the  December  conference  to 
submit  the  following  question  to  a  vote  of  all  the  miners 
of  Great  Britain,  ''Are  you  in  favor  of  giving  notice  to 
establish  the  principle  of  a  minimum  wage  for  every  man 
working  underground  in  the  mines  of  Great  Britain?" 
The  vote  was  taken  on  January  18,  and  the  result  was 
declared  at  a  national  conference  held  at  Birmingham 
shortly  afterwards.  The  result  showed  a  large  majority 
(445,801  to  115,721)  in  favor  of  giving  notice  on  February 
2.  A  further  meeting  of  the  Federation  was  held  in  Lon- 
don at  which  the  claims  of  each  district  were  formulated 
which  were  to  form  the  basis  of  future  negotiations.  On 
February  7,  a  national  conference  of  the  owners  and 
miners  was  held  in  London,  but  it  failed  to  arrive  at  any 
decision.  The  operators  were  prepared  to  consider  the 
question  of  abnormal  places  if  the  miners  withdrew  their 
demand  for  a  district  minimum  wage,  but  this  the  miners 
were  unwilling  to  do.  February  20,  Premier  Asquith 
called  a  conference  of  the  operators  and  miners  at  which 


•Journal  des  Economistes,  March,  1912. 


74  A   LEGAL  MINIMUM   WAGE 

the  following  proposals  for  the  settlement  of  the  dispute 
were  submitted  to  both  parties : 

(1)  His  Majesty's  government  are  satisfied  after 
careful  consideration  that  there  are  cases  in  which  under- 
ground miners  cannot  earn  a  reasonable  minimum  wage 
for  cause  over  which  they  have  no  control. 

(2)  They  are  further  satisfied  that  the  power  to  earn 
such  a  wage  should  be  secured  by  arrangements  suitable 
to  the  circumstances  of  each  district,  adequate  safeguards 
being  provided  to  protect  employers  against  abuse. 

(3)  His  Majesty's  government  are  prepared  to  confer 
with  the  parties  as  to  the  best  methods  of  giving  practical 
effect  to  these  conclusions,  by  means  of  district  confer- 
ences between  the  parties,  a  representative  appointed  by 
the  government  being  present ;  in  the  event  of  any  of  the 
conferences  failing  to  arrive  at  a  complete  settlement 
within  a  reasonable  time,  the  representatives  appointed 
by  His  Majesty's  government  to  decide  jointly  any  out- 
standing points  for  the  purpose  of  giving  effect  to  the 
above  principles.^" 

These  proposals  were  acceptable  to  the  great  majority 
of  the  mine-owners  of  England  and  North  Wales,  but  the 
owners  of  Scotland  and  South  Wales  were  unwilling  to 
accept  them  on  the  ground  that  they  constituted  a  repudi- 
ation of  already  existing  agreements.  The  miners  also 
rejected  them  on  the  grounds  that  they  could  not  submit 
to  arbitration  the  demands  formulated  by  the  different 
districts  on  February  2  in  regard  to  an  individual  mini- 
mum wage.  On  March  1,  the  notice  to  strike  became  effec- 
tive and  on  that  day  about  1,000,000  miners  left  their 
work.  On  March  8,  the  government  called  another  confer- 
ence of  the  mine  owners  which  was  opened  March  12,  with 
the  Prime  Minister  in  the  chair,  and  came  to  a  close 
March  15,  without  bringing  the  parties  to  an  agreement 
in  regard  to  the  matter  in  dispute. 


••Board  of  Trade  Labor  Gazette,  March,  1912,  p.  83, 


THE   COAL  MINES    (MINIMUM   WAGe)    ACT  75 

The  government  had  now  used  every  means  in  its 
power  to  bring  the  parties  to  an  agreement  but  without 
any  satisfactory  results.  Conciliation  had  failed  and 
there  was  no  alternative  except  to  have  the  government 
step  in  and  decide  the  questions  in  dispute.  Mr.  Asquith, 
therefore,  decided  to  ask  Parliament  for  a  legislative  dec- 
laration on  the  matter  and  on  March  19,  the  Coal  Mines 
Minimum  Wage  Act  was  introduced  into  the  House  of 
Commons.  The  purpose  of  this  act  was  to  provide  a  rea- 
sonable minimum  wage  for  miners  and  at  the  same  time 
to  provide  adequate  safeguards  for  the  protection  of  the 
employer. 

The  machinery  of  this  law  was  very  similar  in  many 
respects  to  the  machinery  usually  employed  in  collective 
bargaining.  The  minimum  wage  for  each  district  was  to 
be  determined  by  a  joint  district  board;  and  this  same 
district  board  was  to  lay  down  the  rules  with  which  the 
workers  had  to  comply  in  order  to  earn  the  minimum 
wage."  The  board  had  to  determine  when  and  how  the 
worker  was  to  forfeit  his  right  to  the  minimum  wage. 
These  rules  laid  down  by  the  district  board  were  intended 
to  guarantee  to  the  employer  a  certain  rate  of  efficiency 
and  regularity  among  his  workers.  They  were  to  safe- 
guard him  against  paying  inefificient  and  irregular  work- 
ers more  than  the  value  of  their  labor.  The  district 
boards  are  equally  representative  of  both  sides.  Em- 
ployers and  employes  appoint  their  representatives  on 
them  in  equal  proportions.  The  chairman  of  the  board 
is  chosen  by  the  representatives  of  employers  and  em- 
ployes or  on  their  failure,  by  the  Board  of  Trade.®^  If 
within  two  weeks  after  the  passing  of  the  Act,  the  em- 
ployers and  employes  have  not  succeeded  in  establishing 
a  district  board,  the  Board  of  Trade  may  establish  such 
a  board  itself.**^    When  a  joint  district  board  has  been 


"Coal  Mines  (Minimum  Wage)  Act,  1912,  sec.  1,  subsec.  1. 
"Act,  sec.  2,  subsec.  2. 
"Act,  see.  4,  subsec.  1. 


76  A   LEGAL   MINIMUM   WAGE 

established  in  any  district  it  proceeds  to  fix  minimum 
rates  of  wages  and  to  draw  up  district  rules.  Herein  it 
follows  the  ordinary  methods  of  collective  bargaining. 
Employers  and  employes  set  forth  their  demands.  If 
they  come  to  an  agreement  then  the  system  of  legal  regu- 
lation under  which  this  agreement  is  carried  out  differs 
little  from  a  system  of  collective  bargaining.  It  is  only 
after  the  parties  have  failed  to  come  to  an  agreement  that 
the  legal  machinery  provided  by  the  Coal  Mines  Act  loses 
its  similarity  to  collective  bargaining  and  becomes  more 
like  a  system  of  compulsory  arbitration.  In  collective 
bargaining,  industrial  anarchy  is  the  result  of  disagree- 
ment, but  under  a  system  of  legal  regulation  like  that  pro- 
vided by  the  Coal  Mines  Act,  society  steps  in  and  imposes 
its  will  upon  the  parties.  Under  the  Coal  Mines  Act,  this 
is  done  through  the  outside  independent  chairman.  The 
act  specifies  that  if  the  board  within  three  weeks  after 
its  establishment,  fails  to  determine  minimum  rates  of 
wages  or  to  draw  up  district  rules,  the  chairman  shall 
settle  the  rates  and  rules.®* 

In  the  House  of  Commons,  the  Coal  Mines  Act  was 
passed  on  second  reading  by  213  to  38  votes  and  it  went 
through  the  Lords  without  a  dissenting  voice.®^  The 
labor  members  of  the  House  of  Commons  did  everything 
in  their  power  to  prevent  the  passing  of  the  law  in  its 
present  form.  They  tried  to  have  a  clause  inserted  in 
the  law  establishing  a  flat  minimum  wage  of  a  specified 
amount  throughout  the  whole  country,  but  the  govern- 
ment was  opposed  to  any  such  flat  minimum,  for  they  be- 
lieved that  it  would  impose  an  undue  hardship  on  certain 
classes  of  operators  in  mines  of  an  inferior  quality.  The 
government  believed  that  it  was  better  all  round  for  each 
district  to  determine  its  own  minimum  wage  rates 
adapted  to  its  own  peculiar  circumstances  and  needs. 
After  the  passing  of  the  law,  the  employers  declared 


'*Act,  sec.  4,  subsec.  2. 

n.abor  Gazette,  April,  1912,  126. 


THE   COAL  MINES    (MINIMUM   WAGe)    ACT  77 

themselves  prepared  to  cooperate  with  the  government  in 
its  administration.  The  workers,  however,  still  main- 
tained their  attitude  of  opposition, ^^  The  majority  of 
them  were  still  opposed  to  resuming  work ;  but  the  leaders 
of  the  miners  concluded  that  nothing  was  to  be  gained  by 
opposing  the  government,  and  as  a  means  of  overcoming 
the  opposition  of  the  radical  element,  they  proposed  that 
a  two-thirds  vote  should  be  necessary  to  continue  the 
strike  as  a  two-thirds  vote  had  been  necessary  to  inaugu- 
rate it.  As  the  radicals  were  not  able  to  obtain  the  re- 
quired two-thirds'  majority,  it  was  decided  that  the 
miners  should  return  to  work  and  try  to  make  the  best 
out  of  the  law  as  it  had  been  passed. 

The  objections  of  the  mine  owners  against  minimum 
wage  legislation  were  mainly  two.  In  the  first  place  they 
claimed  that  on  account  of  the  difference  between  the  dif- 
ferent districts,  it  would  be  impossible  to  apply  the  same 
minimum  throughout.  Secondly  they  claimed  that  a 
universal  minimum  wage  specified  by  Parliament  would 
leave  them  without  any  means  of  defence  against  careless 
and  inefficient  workers.  These  objections  were  taken  into 
account  in  the  framing  of  the  law  and  also  in  the  district 
rules.  Parliament  abstained  from  determining  any  spe- 
cific standard  of  payment  applicable  in  all  districts,  and 
by  so  doing  excluded  from  the  law  a  feature  that  would 
have  proved  very  objectionable  to  employers.  Parlia- 
ment also  left  the  employers  a  weapon  of  defence  against 
careless  and  inefficient  workers,  in  as  much  as  it  author- 
ized the  district  boards  to  make  specific  regulations  in 
regard  to  the  degree  of  efficiency  and  regularity  of  work 
necessary  to  qualify  for  the  minimum  wage.  All  the 
district  rules  which  have  so  far  been  drawn  up,  exclude 
persons  above  a  certain  age  from  the  right  to  receive  the 
minimum  wage.  In  North  Wales  the  age  limit  is  60,  in 
Monmouth,  63,  in  Derbyshire,  South  Derbyshire,  Notting- 


'"Labor  Gazette,  April,  1912,  p.  130. 


78  A   LEGAL  MINIMUM   WAGE 

hamshire  and  Scotland,  65.  Cleveland  and  Northumber- 
land distinguish  between  contract  workers  for  whom  the 
age  limit  is  57,  and  the  ordinary  day  laborers  for  whom 
the  age  limit  is  63.  Insufficient  output  also  excludes  the 
workers  from  the  right  to  receive  a  minimum  wage.  In 
all  the  districts  a  person  must  have  reached  a  certain 
standard  of  output  for  a  prescribed  period  of  time  in 
order  to  qualify  for  the  minimum  wage.  In  South  Staf- 
fordshire the  period  for  which  a  person  must  have 
reached  the  required  standard  of  output  is  five  weeks,  in 
Bristol  two  weeks,  and  in  North  Wales  three  months. 
From  this  rule  are  excepted  abnormal  places  where  the 
work  is  so  difficult  as  to  make  the  required  standard  of 
output  impossible  of  attainment.  In  order  to  insure  a 
certain  regularity  among  the  workers,  the  district  rules 
specify  that  if  the  workers  miss  a  certain  number  of 
shifts  they  shall  forfeit  their  right  to  a  minimum  wage. 
As  a  further  guarantee  of  efficiency  the  district  rules 
require  the  workers  to  have  a  certain  amount  of  experi- 
ence in  order  to  qualify  for  the  minimum  wage.  The 
time  usually  considered  necessary  to  acquire  this  experi- 
ence is  about  three  months. 

When  a  dispute  arises  about  the  amount  of  wages  to 
be  paid  to  a  worker  or  the  violation  of  district  rules,  the 
matter  is  taken  up  in  the  first  instance  between  the  worker 
and  the  competent  mine  official.  If  they  fail  to  come  to 
an  agreement  it  is  referred  to  an  agent  of  the  miners' 
association  and  the  management  of  the  mine.  If  these 
also  should  fail  to  come  to  an  agreement,  the  case  is  re- 
ferred to  a  committee  appointed  by  the  district  board 
with  an  outside  non-partisan  chairman  who  may  cast  the 
deciding  vote.^^ 
(\  The  increase  of  wages  granted  to  the  miners  by  the 
district  boards  has  not  been  very  great.  The  amount  of 
the  increase,  in  1913,  varied  between  10  and  14  per  cent. 


•'Labor  Gazette,  May,  1912,  p.  197. 


THE   COAL  MINES    (MINIMUM   WAGe)    ACT  79 

The  general  level  of  the  miners '  wages  in  1913  was,  how- 
ever, higher  than  in  any  of  the  past  twenty-years,  with  the 
single  exception  of  1900.    As  to  how  far  the  improved  con- 
ditions are  due  to  the  district  boards,  it  is  impossible  to 
say.    It  may  be  that  the  miners  could  have  obtained  the 
same,  or  perhaps  a  greater  increase  by  the  methods  of 
conciliation  formerly  in  vogue.    The  district  boards  se- 
cure for  the  workers  a  certain  minimum  wage  at  all  times, 
but  the  minimum  must  be  rather  low  as  the  boards  are 
obliged  to  take  into  account  the  exigencies  of  the  most 
poorly  managed  mines.    The  minimum  wage  must  not  be  ^ 
so  high  as  to  impose  excessive  burdens  on  these  poorly  {  ^ufitiU 
managed  mines.     The  rate  fixed  for  any  district  must,  »   ^^iM„t«^ 
therefore,  depend,  in  a  large  measure,  on  the  exigencies   ' 
of  the  most  poorly  managed  mines.®*    This  is  one  of  the 
many  reasons  why  the  miners  have  been  dissatisfied  with 
the  Minimum  Wage  Act  of  1912. 


"London  Quarterly  Review,  1912,  vol.  V,  p.  573. 


-y 


CHAPTER  VIII. 
THE  MINIMUM  WAGE  MOVEMENT  IN  AMERICA. 

The  movement  for  minimum  wage  legislation  in  this 
country  got  its  first  impetus  from  the  Consumers  League, 
organized  in  New  York  City  about  twenty-five  years  ago. 
This  organization  with  its  national  and  local  bodies  at 
first  tried  to  secure  for  the  workers  higher  wages,  shorter 
hours  and  improved  working  conditions  by  educating  the 
consuming  public.  The  Consumers  League  tried  to 
arouse  public  interest  in  the  condition  of  the  wage-earners 
by  bringing  before  the  public  the  conditions  under  which 
they  worked,  as  well  as  the  wages  they  received.  For  the 
city  of  New  York,  they  drew  up  a  white  list  containing  the 
names  of  employers  in  different  trades  who  enforced 
standards  of  wages,  hours,  and  working  conditions. 
After  fifteen  years  of  educational  work  the  league  con- 
cluded that  something  else  had  to  be  done  in  order  to 
obtain  the  object  which  they  had  set  before  them.  The 
formation  of  public  opinion  was  a  necessary  step  towards 
securing  a  minimum  wage  for  women  workers,  but  it 
was  felt  that  in  order  to  be  really  effective  public  opin- 
ion had  to  find  expression  in  law,  for,  no  matter  what  the 
public  feeling  and  sentiment  on  the  question  might  be, 
employers  would  not,  as  a  rule,  pay  a  living  wage  to  all 
their  workers  unless  compelled  thereto  by  law.  In  1908, 
therefore,  the  National  Consumers  League  adopted  mini- 
mum wage  legislation  as  a  part  of  their  10-year  pro- 
gram. They  resolved  to  devote  the  next  ten  years  to 
securing  the  passage  of  a  minimum  wage  law  in  every 
State  in  the  Union. 

In  their  campaign  for  minimum  wage  legislation  since 
1908,  the  Consumers  League  had  to  overcome  the  same 
difficulties  as  the  advocates  of  workmen's  compensa- 
tion and  the  hours  legislation.  In  the  first  place  they  had 
to   overcome   the    organized    opposition    of    employers; 

80 


THE   MINIMUM    WAGE  MOVEMENT   IN   AMERICA  81 

secondly,  they  had  to  overcome  the  strong  individualistic 
philosophy  of  the  American  people ;  thirdly,  they  had  to 
overcome  the  constitutional  difficulty.  There  was  and  still 
is  a  danger  lest  minimum  wage  legislation  may  be  held 
to  be  an  unwarranted  interference  with  the  liberty  and 
property  rights  of  the  individual  and  an  interference, 
therefore,  which  is  not  justified  under  the  police  power  of 
the  State. 

Notwithstanding  the  various  obstacles  in  its  path,  the 
minimum  wage  movement  has  made  considerable  head- 
way in  this  country  during  the  past  three  years.  In  1912 
the  State  legislature  of  Massachusetts  passed  a  minimum 
wage  law.  In  1913,  minimum  wage  laws  were  passed  by 
the  legislatures  of  California,  Colorado,  Minnesota,  Ne- 
braska, Oregon,  Utah,  Washington  and  Wisconsin.  In 
addition  to  the  States  enacting  this  form  of  legislation  in 
1913,  a  number  of  others  gave  the  matter  serious  con- 
sideration. Among  these  were,  Michigan,  Missouri,  Kan- 
sas, Pennsylvania,  New  York,  Maryland  and  Connecticut. 
The  legislatures  of  these  States  concluded  that  the  time 
was  not  yet  ripe  for  the  enactment  of  minimum  wage  leg- 
islation. In  New  York,  Michigan,  Missouri,  Kansas  and 
Connecticut,  however,  it  was  felt  that  this  question  was 
one  of  which  the  State  should  take  cognizance.  Accord- 
ingly, the  New  York  legislature  authorized  the  Factory 
Investigating  Commission,  which  had  been  created  in  that 
State  in  1911,  ''to  inquire  into  the  rates  of  wages  paid  in 
the  different  industries  of  the  State  and  to  report  on  the 
advisability  of  establishing  minimum  rates  of  wages." 
The  legislatures  of  Michigan  and  Missouri,  also,  ap- 
pointed special  commissions  to  investigate  the  wages  of 
women  workers  in  the  various  industries  of  these  two 
States.  The  Kansas  and  Connecticut  legislatures  au 
thorized  their  labor  commissioners  to  make  similar  inves- 
tigations. 

The  minimum  wage  laws,  so  far  passed  or  proposed  in 
the  various  States,  have  been  based  on  three  distinct 


A   LEGAL  MINIMUM   WAGE 


principles.  In  the  first  place,  Massachusetts  conceived 
the  idea  that  the  State  might  determine  a  minimum  wage 
through  an  appointed  commission,  but  that  having  deter- 
mined this  minimum  wage  it  might  safely  leave  its  en- 
forcement to  public  opinion.  This  idea  was  also  incor- 
porated in  the  Nebraska  law  passed  in  1913.  The  second 
principle  was  that  embodied  in  the  Utah  law  passed  in 
1913  and  also  in  the  defeated  Kansas  bill  of  the  same 
year.  According  to  the  Utah  principle,  the  State  forbids 
the  employment  of  women  and  minors  at  less  than  a  speci- 
fied minimum  wage,  the  minimum  being  the  same 
throughout  the  whole  State  and  in  all  employments.  The 
third  principle  was  that  embodied  in  the  minimum  wage 
laws  of  California,  Colorado,  Minnesota,  Oregon,  Wash- 
ington and  Wisconsin.  The  legislatures  of  these  States 
did  not  believe  that  public  opinion  was  a  sufficient  sanc- 
tion for  the  enforcement  of  a  minimum  wage  law.  Sec- 
ondly, they  concluded  that  on  account  of  the  different  con- 
ditions prevailing  in  different  industries  and  in  different 
parts  of  the  State,  it  would  not  be  advisable  to  determine 
by  law  any  specific  minimum  wage  applicable  in  all  indus- 
tries employing  women  and  minors  throughout  the  State. 
They  concluded  that  it  would  be  more  in  harmony  with  the 
approved  experience  and  established  policies  of  other 
countries  to  set  up  a  machinery  which  would  first  examine 
the  wages  and  needs  of  employes  in  the  different  indus- 
tries and  afterwards  fix  a  minimum  below  which  it  would 
be  unlawful  for  anyone  to  employ  women  or  minors. 

Unlike  the  Australasian  colonies  and  England,  mini- 
mum wage  legislation  in  this  country  has  been  confined  to 
securing  of  a  living  wage  for  women  and  minors.*'^  It  is 
generally  felt  that  minimum  wage  legislation  for  men 
would  be  held  unconstitutional  by  American  courts  at  the 
present  time,  but  this,  after  all,  is  not  the  real  difficulty  in 


"It  may  be  noted  at  this  point  that  a  constitutional  amendment 
authorizing  the  legislature  to  pass  minimum  wage  legislation  for  men 
and  women  alike  was  submitted  to  the  voters  of  Ohio,  in  1912,  and 
ratified  by  them. 


THE   MINIMUM    WAGE   MOVEMENT   IN   AMERICA  83 

the  way  of  its  adoption.  If  the  American  people  realized 
the  need  of  minimum  wage  legislation  for  men,  they 
could  soon  bring  the  courts  to  their  way  of  thinking,  or,  if 
not,  they  could  pass  a  constitutional  amendment.  Back  of 
the  constitutional  difficulty,  then,  there  is  a  more  funda- 
mental reason  for  restricting  minimum  wage  legislation 
to  women  and  minors.  In  the  case  of  women  and  minors, 
it  is  a  question  of  securing  a  personal  wage,  while  in  the 
case  of  men  it  is  a  question  of  securing  a  family  wage. 
Now  the  securing  of  a  family  wage  is  a  far  more  difficult 
and  far-reaching  undertaking  than  the  securing  of  a  per- 
sonal wage,  and  for  two  reasons.  In  the  first  place,  the 
minimum  must  be  fixed  at  a  higher  point  to  secure  a 
family  wage  than  to  secure  a  personal  wage  with  the  re- 
sult that  it  will  cause  more  industrial  disturbances.  In 
the  second  place,  the  securing  of  a  family  wage  means  that 
the  State  practically  takes  over  complete  control  of  the 
labor  contract  for  if  it  regulates  the  wages  of  the  un- 
skilled worker  who  has  been  unable  to  obtain  a  fair  wage 
by  collective  bargaining,  why  should  it  not  step  in  and 
regulate  wages  where  collective  bargaining  breaks  down. 

No  organization  in  America  is  more  firmly  opposed  to 
the  regulation  of  men's  wages  by  law  than  the  American 
Federation  of  Labor.  '  *  If  it  were  proposed  in  this  coun- 
try to  vest  authority  in  a  tribunal  to  fix  by  law  the  wages 
of  men,  organized  labor  would  protest  by  every  means  in 
its  power,"  declared  the  executive  council  of  the  Ameri- 
can Federation  of  Labor  in  1913.  ''Through  organiza- 
tion, the  wages  of  men  can  and  will  be  maintained  at  a 
higher  rate  than  they  would  if  fixed  by  legal  enactment. ' ' 
''This  opposition  of  organized  labor  is  in  all  probability 
sufficient  to  make  the  regulation  of  men's  wages  by  law 
at  the  present  time  a  political  impossibility. '  '^^ 

Whatever,  then  may  be  said  about  the  legal  regulation 
of  the  wages  of  men  as  an  economic,  social  and  ethical 


"Report  of  the  proceedings  of  the  Thirty-Third  Annual  Convention  of 
the  American  -Federation  of  Labor,  p.  63. 


84  A   LEGAL  MINIMUM   WAGE 

policy,  it  is  not  politically  feasible  at  the  present  time. 
The  legal  regiilation  of  women's  wages  is,  however,  com- 
ing more  and  more  within  the  region  of  practical  politics. 
It  is  generally  felt  that  the  need  for  wage  legislation  is  far 
greater  in  the  case  of  women  than  of  men.  On  the  one 
hand  women's  position  as  a  child  bearer  makes  her  health 
and  welfare  a  matter  of  public  concern.  She  is  destined 
to  bring  forth  children  who  will  be  the  future  citizens  of 
the  country  and  on  whose  health  and  efficiency  the  welfare 
and  prosperity  of  the  country  will  depend.  If  the  women 
of  the  country  are  not  properly  nourished,  they  cannot 
bring  forth  strong  and  healthy  children,  and  without 
strong  and  healthy  children,  we  cannot  expect  the  race  to 
maintain  its  strength  and  vigor.  On  the  other  hand, 
women  on  account  of  their  weakness  are  an  easy  prey 
to  unscrupulous  and  over-exacting  employers.  They 
have  not  at  all  the  same  powers  of  organization  as  men, 
for  the  reason  that  the  majority  of  them  intend  to  remain 
in  industry  only  for  a  short  time.  ^ '  That  the  girls  remain 
unorganized  in  spite  of  the  marked  tendency  toward  or- 
ganization in  other  lines,"  says  the  United  States  Bureau 
of  Labor  Statistics,  ''is  entirely  conceivable  in  view  of  the 
fact  that  approximately  50  per  cent,  of  them  are  twenty- 
one  years  of  age  and  under.  Young  women  of  that  age 
do  not  look  upon  employment  as  a  life  work.  Their  stakes 
in  the  results  of  organization  are  not  large  enough  to  at- 
tract them  and  as  they  are  the  girls  in  demand,  the  other 
50  per  cent,  of  the  women  employes  are  without  adequate 
leverage  to  effect  organization  with  convincing  bargain- 
ing power.  "^^  The  women  workers  look  forward  to  mar- 
riage as  a  relief  from  the  drudgery  of  the  department 
store  or  factory  and  for  this  reason  trade  unionism  does 
not  make  such  an  appeal  to  them  as  to  men;  and  since 
there  is  very  little  hope  of  organizing  women  workers  on 


•'Report  of  U.  S.  Bureau  of  Labor  Statistics  on  Women  and  Child 
Wage-earners,  toI.  V,  p.  26. 


THE   MINIMUM   WAGE   MOVEMENT   IN   AMERICA  85 

any  extensive  scale  at  the  present  time,  the  only  means  of 
securing  a  reasonable  wage  for  them  is  by  legislation. 

The  two  facts  which  gave  the  greatest  impetus  to 
minimum  wage  legislation  in  this  country  were  the  pass- 
ing of  the  English  Trade  Boards  Act  in  1909,  and  the  ex- 
haustive report  of  the  Federal  Bureau  of  Labor  Statis- 
tics on  "Women  and  Child  Wage-earners  in  the  United 
States,"  in  1910.  The  people  in  this  country  were  not 
much  influenced  by  the  experience  of  Australia  in  mini- 
mum wage  legislation.  There  were  so  many  differences, 
it  was  claimed,  between  Australia  and  America  that  an 
experiment  which  might  have  worked  out  very  success- 
fully in  the  former  country  might  prove  a  total  failure  in 
the  latter.  The  Australians  were  normally  inclined  to  de- 
pend more  on  their  government  than  the  Americans  and 
their  industrial  system  was  not  at  all  so  complex  as  the 
industrial  system  of  this  country.  With  England,  how- 
ever, the  case  was  different.  Here  was  a  country  with  a 
people  very  like  the  Americans  in  aims  and  ideals  and 
with  an  industrial  organization  just  as  complex  as  that  of 
America.  If  then  the  wage  board  system  had  been  a  suc- 
cess in  England,  why  could  it  not  be  a  success  in  this  coun- 
try. This  argument  has  made  and  still  makes  a  powerful 
appeal  to  our  courts  and  legislatures. 

If  the  wages  board  system  of  Victoria  had  been  a  suc- 
cess in  England,  with  an  industrial  organization  similar 
to  our  own,  the  only  question  which  the  American  legisla- 
ture required  to  have  answered  before  adopting  it,  and 
the  American  judge  before  upholding  its  constitutionality, 
was  whether  there  was  a  real  need  for  it  in  this  country. 
This  question  was  answered  by  the  United  States  Bureau 
of  Labor  Statistics  in  its  **Keport  on  the  Wages  and  Liv- 
ing Conditions  of  Women  and  Child  Wage-earners  in  the 
United  States."  The  bureau  found  that  of  the  women 
and  girls  employed  in  the  department  stores  of  our  large 
cities,  34.6.  per  cent,  of  those  living  at  home  witli  their 
families  earned  less  than  $6.00  a  week  and  68.7  less  than 


A   LEGAL  MINIMUM   WAGE 


$8.00.  Of  those  adrift,  i.e.,  living  in  boarding  and  lodg- 
ing houses  as  well  as  those  whose  so-called  homes  have 
become  an  impending  wreckage,  it  found  that  19.3  per 
cent,  earned  less  than  $6.00  a  week,  and  58.6  per  cent,  less 
than  $8.00.  The  wages  of  girls  employed  in  factories 
were  found  to  be  even  still  lower  than  those  employed  in 
stores.  Thus,  out  of  10,149  females  employed  in  the  man- 
ufacture of  men's  clothing  in  representative  factories  in 
Chicago,  Eochester,  New  York,  Philadelphia  and  Balti- 
more, it  was  found  that  1098  or  20  per  cent,  earned  less 
than  $4.00  a  week,  1,492  or  34  per  cent,  earned  less  than 
$5.00  a  week,  and  1,517  or  59  per  cent,  less  than  $6.00  a 
week.®^  A  similar  situation  in  regard  to  low  wages  has 
since  been  brought  to  light  by  the  investigations  of  the 
Massachusetts  Minimum  Wage  Commission,  the  Wash- 
ington Industrial  Welfare  Commission,  the  Oregon  Con- 
sumers League  and  the  New  York  Factory  Investigating 
Commission.  The  Massachusetts  Minimum  Wage  Com- 
mission found  65  per  cent,  of  the  women  workers  in  the 
candy  industry  of  the  State  earning  less  than  $6.00  a 
week,  and  29  per  cent,  of  those  in  retail  stores,  4,051  of 
those  employed  in  laundries  and  37  per  cent,  of  those  em- 
ployed in  factories,  earning  less  than  the  same  amount. 
The  Washington  Industrial  Welfare  Commission  found 
that  55.6  per  cent,  of  the  mercantile  store  employes,  71.2 
per  cent,  of  the  factory  employes,  and  72.4  per  cent,  of  the 
laundry  employes  earned  less  than  $10.00  a  week.  The 
Oregon  Consumers  League  found  that  59.6  per  cent,  of 
the  female  employes  investigated  by  it,  received  less 
than  $10.00  a  week.  The  New  York  Factory  Investigating 
Commission  found  that  half  of  the  department  store  girls 
in  New  York  earned  less  than  $7.50  a  week,  and  that  one- 
half  of  those  employed  in  the  confectionery  industry  of 
the  State  earned  less  than  $6,50,  while  about  one-sixth  of 


"Report  on  Women  and  Child  Wage-earners,  vol.  II,  p.  130. 


THE  MINIMUM   WAGE   MOVEMENT   IN   AMERICA  87 

the  females  employed  in  all  the  industries  investigated  by 
the  commission,  received  less  than  $5.00  a  week.®^ 

When  we  compare  the  foregoing  facts  with  the  var- 
ious estimates  of  the  cost  of  living  of  a  working  woman, 
we  are  forced  to  conclude  that  a  large  percentage  of  our 
women  workers  are  receiving  less  than  the  minimum 
amount  necessary  to  maintain  them  in  health  and  decency. 
Practically  all  students  of  the  question  agree  that  the 
woman  wage-earner  cannot  supply  herself  with  absolute 
necessities  on  less  than  $7.00  a  week.  It  would  take  this 
amount  to  supply  the  girl  with  room  and  broad,  clothing 
and  carfare.  Nothing  would  be  left  to  tide  her  over 
periods  of  sickness.  There  would  be  no  allowance  for 
church,  insurance,  laundry,  amusements,  education  or 
medical  attention.  Allowances  for  these  items  which  are 
generally  looked  upon  as  a  necessary  part  of  the  cost  of 
living  would  raise  the  amount  necessary  to  maintain  the 
working  woman  in  health  and  decency  to  $8.50  a  week. 
The  estimates  of  a  living  wage  for  a  woman  worker,  liv- 
ing away  from  home,  vary  between  $8.53  a  week,  which 
was  the  estimate  of  the  Senate  Wage  Commission  of  Mis- 
souri, and  $11.00  a  week,  which  was  the  estimate  of  the 
Wage  Conference  appointed  by  the  Washington  Indus- 
trial Welfare  Commission  for  Hotels  and  Restaurants. 
The  fact  that  a  large  percentage  of  women  wage-earners 
receive  less  than  a  living  wage,  even  according  to  the  low- 
est estimate,  must  be  the  cause  of  many  hardships  and 
deprivations  to  them. 


•'Survey,  vol.  XXXIII,  No.  19,  p.  505. 


CHAPTER  IX. 

MINIMUM  WAGE  LEGISLATION  IN  MASSACHU- 
SETTS. 

Massachusetts  was  the  first  American  State  in  which 
there  was  a  well-organized  movement  for  minimum  wage 
legislation.  In  1911,  a  petition  was  presented  to  the  legis- 
lature of  that  State  asking  for  an  investigation  with  re- 
gard to  the  desirability  of  passing  a  minimum  wage  law  in 
that  state.  In  response  to  this  i^etition,  the  legislature 
passed  a  resolution  authorizing  the  governor  to  appoint  a 
commission  ' '  to  study  the  matter  of  wages  of  women  and 
minors  and  to  report  on  the  advisability  of  establishing  a 
board  or  boards  to  which  shall  be  referred  inquiries  as 
to  the  need  and  feasibility  of  fixing  minimum  rates  of 
wages  for  women  and  minors  in  any  industry."^*  After 
an  extensive  investigation  of  the  confectionery  industry, 
retail  stores  and  laundries,  the  commission  made  its  re- 
port in  1912.  It  found  that  of  1,218  women,  eighteen 
years  and  over,  employed  in  the  candy  industry,  whose 
ages  and  earnings  were  ascertained,  41  per  cent,  averaged 
less  than  $5.00  a  week,  and  65  per  cent,  less  than  $6.00  a 
week.  Of  the  2,861  women  workers  in  retail  stores  whose 
ages  and  earnings  were  ascertained,  it  found  that  10  per 
cent,  averaged  less  than  $5.00  a  week,  and  29.5  per  cent, 
less  than  $6.00  a  week.  Of  the  1,219  laundry  workers,  it 
found  that  21  per  cent,  averaged  less  than  $5.00  a  week, 
45.11  per  cent,  less  than  $6.00  and  64.33  per  cent,  less  thaa 
$7.00.*^^  The  commission  found  that  the  lowest  rates  of 
wages  were  not  at  all  uniformly  distributed.  In  some  es- 
tablishments the  percentage  of  workers  receiving  ex- 
tremely low  wages  was  very  large,  while  in  others  it  was 
very  small. 


"First  Annual  Report  of  the  Minimum  Wage  Commission  of  Mass., 
p.  6. 

'"Report  of  the  Commission  on  Minimum  Wage  Boards,  p.  10. 

88 


MINIMUM    WAGE    LEGISLATION   IN   MASSACHUSETTS  89 

In  the  candy  industry,  for  instance,  with  its  40  per 
cent,  of  adult  women  workers  receiving  less  than  $5.00  a 
week,  a  comparison  of  the  wage  rates  in  eleven  different 
establishments  showed  that  the  lowest  wages  were  con- 
fined to  six  factories  in  one  of  which  53.3  per  cent,  of  the 
employes  received  less  than  $5.00  a  week.  In  the  otlier 
five  factories  not  a  single  employe  of  eighteen  years  or 
over  was  paid  so  low  a  wage.  Similar  differences  in 
wages  were  discovered  in  the  different  stores  and  laun- 
dries. Thus,  for  instance,  in  two  out  of  six  department 
stores  in  Boston,  2.2  and  1.4  per  cent,  respectively  of  the 
employes  received  under  $5.00  a  week,  while  in  two  others 
the  percentage  of  those  receiving  under  $5.00  a  week 
amounted  as  high  as  16.7  and  18.2  per  cent,  respectively. 
In  four  out  of  the  twelve  laundries  studied,  the  percentage 
of  workers  receiving  under  $4.00  a  week  ranged  from 
about  1.5  to  2.5  per  cent,  while  in  three  others  it  ranged 
from  about  16  to  29  per  cent,  of  all  the  workers.^'' 

From  these  differences  in  the  wages  of  the  different 
establishments,  the  commission  concluded  that  different 
employers  pay  different  rates  of  wages  for  the  same 
service.  It  is  very  doubtful,  indeed,  if  one  laundrj^  and 
especially  one  mercantile  store  in  a  locality  can  pay  a 
lower  rate  of  wages  than  a  competitor  and  yet  maintain  a 
very  high  degree  of  efficiency  among  its  workers.  Under 
normal  circumstances,  the  more  efficient  help  will  gravi- 
tate towards  the  factories  and  stores  paying  the  higher 
rates  of  wages.  The  natural  result  of  the  operation  of 
this  economic  law  is  likely  to  be  that  the  poorly  paying 
employer  will  receive  a  poor  quality  of  service.  Mana- 
gers of  department  stores  are  pretty  shrewd  judges  of 
human  nature ;  they  know  that  appearances  play  a  large 
part  in  the  efficiency  of  their  women  workers,  and  they 
also  know  that  the  workers  cannot  keep  up  appearances 
if  they  do  not  receive  fairly  good  wages.  The  more  re- 
cent investigators  seem  to  have  realized  the  force  of  this 

'"Ibid.,  p.  12. 


90  A    LEGAL  MINIMUM   WAGE 

economic  law  and  have,  therefore,  attributed  the  differ- 
ences in  wages  between  the  different  factories  and  depart- 
ment stores  in  part  at  least,  to  a  difference  in  the  quality 
of  the  service  rendered  or  in  the  product  turned  out.  The 
Massachusetts  permanent  minimum  wage  commission  in 
its  report  on  the  candy  industry  says  that  "a  possible 
explanation  of  such  differences  (differences  in  wages) 
may  be  in  the  kind  of  the  product  manufactured. ' '"  The 
New  York  Factory  Investigating  Commission  says 
that  difference  in  product  may  in  part  explain  such 
variations.^* 

As  a  result  of  its  investigation,  the  Massachusetts 
Minimum  Wage  Investigating  Commission  concluded 
that  a  large  number  of  women  and  minors  in  the  con- 
fectionery industry,  retail  stores  and  laundries  of  the 
State  were  receiving  less  than  the  amount  required  to 
maintain  them  in  health  and  efficiency.  Under  such  cir- 
cumstances, the  commission  concluded,  "Industry  is  in 
receipt  of  the  working  energy  of  a  human  being  at  less 
than  its  cost,  and  to  that  extent  is  parasitic.  The  balance 
must  be  made  up  in  some  other  way.  It  is  generally  paid 
by  the  industry  employing  the  father;  it  is  sometimes 
paid  in  part  by  the  future  inefficiency  of  the  worker  her- 
self and  of  her  children  and  perhaps  in  part  ultimately 
by  charity  and  the  State. '  "'•* 

It  was  the  conviction  of  the  Massachusetts  Commis- 
sion that  the  low  wages  of  the  women  workers  in  the 
State  necessitated  a  change  in  the  contractual  relations 
of  employers  and  employes.  The  commission  was  of 
opinion  that  the  best  way  to  bring  about  this  change  was 
by  the  creation  of  a  wage  board  system  similar  to  that 
of  Australia  and  England,  Following  the  precedent  estab- 
lished in  America  in  dealing  with  railroad  rates,  the  com- 
mission suggested  the  appointment  of  a  permanent  mini- 


"Wages  of  Women  in  the  Candy  Industry  in  Massachusetts,  p.  23. 
"Third  Report  of  New  York  Factory  Investigating  Commission,  p.  81. 
"Report  of  Massachusetts  Commission  on  Minimum  Wage  Boards, 
p.  17. 


MINIMUM    WAGE   LEGISLATION   IN   MASSACHUSETTS  91 

mum  wage  commission.  This  commission  was  to  have 
authority  to  investigate  the  wages  of  women  and  minors 
in  any  industry  in  the  State,  if  it  was  persuaded  that  any 
substantial  majority  of  the  workers  in  it  were  receiving 
less  than  a  living  wage.  If,  after  investigation,  if  found 
a  substantial  number  of  them  earning  less  than  a  living 
wage,  it  was  to  be  authorized  to  establish  a  wage  board 
for  the  purpose  of  determining  a  minimum  wage  in  the 
particular  industry.  This  determination  of  the  wage 
board  was  to  be  submitted  to  the  commission  for  its  ap- 
proval, and  in  case  the  commission  approved  it,  it  was  to 
give  a  two  weeks'  notice  announcing  a  public  hearing  in 
the  case.  After  the  public  hearing,  it  might  issue  a  man- 
datory order  establishing  a  minimum  wage  for  women 
and  minors  in  the  particular  industry  in  question. 

The  Massachusetts  Commission  presented  its  report 
to  the  legislature  in  1912,  but  the  legislature  did  not 
accept  its  recommendations.  It  feared  the  competition 
of  other  States  in  which  wages  were  lower  and  hours 
longer  than  in  Massachusetts  and  therefore  refused  to 
pass  a  really  effective  minimum  wage  law.  For  the  ef- 
fective minimum  wage  law  proposed  by  the  commission, 
the  legislature  substituted  an  emasculated  law  with  no 
other  sanction  save  that  of  public  opinion.  In  the  law  as 
actually  passed,  provision  was  made  for  the  appointment 
of  a  permanent  minimum  wage  commission.  This  per- 
manent commission  was  authorized  to  conduct  investi- 
gations into  the  wages  of  women  workers  in  the  different 
industries  of  the  State;  it  might  create  a  wage  board 
in  any  particular  industry  to  make  recommendations  in 
regard  to  the  minimum  wage  necessary  to  maintain  the 
workers  in  health  and  efficiency.  The  commission  might 
approve  the  recommendation  of  the  wage  board,  but  it 
had  no  authority  to  enforce  it.  About  all  it  could  do  to 
give  effect  to  the  rulings  was  to  publish  them  in  at  least 
one  newspaper  in  each  county  in  the  State  and  to  publish 


92  A   LEGAL   MINIMUM   WAGE 

the  names  of  employers  paying  or  not  paying  the  mini- 
mum wage. 

The  permanent  Massachusetts  Minimum  Wage  Com- 
mission began  its  work  July  1,  1913.  Between  that  time 
and  October,  1914,  it  made  investigations  of  the  wages  of 
women  employed  in  the  brush  industry,  the  corset  in- 
dustry, the  confectionery  industry  and  laundries.  The 
following  table  summarizes  the  results  of  the  commis 
sion's  investigations  in  these  four  trades: 

number  of  percent 
workers     earning  $9.00 

investi-      under    under  under      under      under      under       and 

gated        $4.00      $5.00  $6.00       $7.00       $8.00        $9.00       over 

Corset  Industry    .  .  2,388  9.6  20.  35.5  53.5  68.7  83.6  16.4 

Candy  Industry    ..  3,326  23.1  49.0  69.6  83.8  92.1  97.5  2.5 

Brush  Industry  ...  597  17.6  42.7  66.2  79.0  88.6  93.  7.0 

Laundries    3,000  8.2  25.0  51.5  68.8  82.2  91.8  8.2 

From  this  table  we  can  see  that  66.2  per  cent,  of  the 
brushmakers,  69.6  per  cent,  of  the  candymakers,  and 
35.5  and  51.5  per  cent.,  respectively,  of  those  employed  in 
the  corset  industry  and  laundries  of  Massachuetts  earn 
less  than  $6.00  a  week.  After  the  investigation,  a  wage 
board  was  created  in  the  brush  industry.  At  first  thouglit 
one  is  inclined  to  wonder  why  the  commission  should  have 
started  with  the  brush  industry,  inasmuch  as  it  is  an 
industry  in  which  interstate  competition  is  very  rife,  but 
the  commission  had  other  reasons  which  offset  the  diffi- 
culty of  interestate  competition.  In  the  first  place,  the 
brush  industry  was  found  to  be  one  of  the  poorest  paying 
industries  in  the  State  of  Massachuetts;  secondly,  it  is 
a  very  small  industry,  and  the  commission  undoubtedly 
considered  it  more  advisable  to  experiment  on  a  small 
scale  at  first. 

It  was  the  policy  of  the  Massachusetts  Minimum 
Wage  Commission  to  make  the  wage  boards  as  far  as 
possible  representative  of  both  sides.  For  this,  em- 
ployers and  emploj^es  were  asked  to  nominate  persons 
to  represent  them  on  the  brush  board.  The  employes, 
although  not  suceeding  in  making  a  sufficient  number  of 


MINIMUM    WAGE   LEGISLATION   IN   MASSACHUSETTS  93 

appointments  to  constitute  their  representation  on  the 
board,  were  in  nearly  all  cases  ready  to  serve  on  it  when 
required  to  do  so.  The  invitations  sent  out  by  the  com- 
mission to  the  employers  and  employes  to  nominate  their 
representatives  were  responded  to  in  two  cases  by  the 
former  and  three  cases  by  the  latter,  the  persons  nomi- 
nated by  the  employers  and  employes  being  in  all  cases 
appointed  by  the  commission  as  members  of  the  board. 
The  workers  who  were  appointed  to  serve  on  the  board 
were  afraid  lest  they  might  incur  the  displeasure  of  their 
employers  and  be  discharged  from  their  positions,  a  fear 
which  was  certainly  justified,  for  shortly  after  their  ap- 
pointment to  the  board,  two  workers  were  laid  off.^"° 

On  June  12,  1914,  the  brush  board  submitted  its 
recommendations  to  the  commission.  It  recommended 
that  a  minimum  wage  of  ISi/o  cents  an  hour,  or  $7.75  a 
week,  for  adult  female  workers  should  go  into  etfect  at 
once,  and  that  at  the  end  of  the  year,  the  rate  should 
be  raised  to  18  cents  an  hour,  or  $9.00  a  week,  unless  in 
the  meantime  employers  brought  such  evidence  before  the 
board  as  would  justify  it  in  establishing  a  lower  rate. 
The  board  recommended  that  learners  and  apprentices 
should  receive  65  per  cent,  of  the  minimum  and  that  the 
period  of  apprenticeship  was  not  to  be  more  than  one 
year.  If  in  any  case  the  piece  rate  yields  less  than  the 
hourly  minimum  for  time  workers,  the  same  hourly  mini- 
mum must  be  applied.  To  the  recommendation  of  the 
board  the  commission  gave  its  tentative  approval  on  June 
13  and  announced  that  a  public  hearing  would  be  held 
on  the  case  June  29.  After  the  public  hearing,  the  com- 
mission entered  a  decree  fixing  the  rate  of  wages  in  the 
brush  industry.  All  the  recommendations  of  the  board 
were  embodied  in  the  decree  save  that  which  required  an 
increase  from  151/2  to  18  cents  an  hour  at  the  end  of  a 
year.    The  commission  considered  that  before  the  end  of 


'""First  Annual  Report  of  the  Massachusetts  Minimum  Wage  Com- 
mission, pp.'  9-10. 


94  A   LEGAL  MINIMUM   WAGE 

the  year  it  would  have  suflficient  time  to  consider  whether 
the  present  rates  should  be  increased  or  not. 

One  of  the  principal  questions  that  arises  in  connec- 
tion with  a  minimum  wage  law  in  common  with  other 
laws  is  the  question  of  its  enforcement.  The  Massachu- 
setts law  was  passed  for  the  purpose  of  securing  a  mini- 
mum wage  for  the  poorly  paid  workers  of  the  State  and 
if  it  does  not  attain  this  purpose,  it  is  evidently  of  little 
avail.  The  commission  may  publish  statistics  of  wages 
in  the  various  trades,  it  may  prescribe  a  minimum  wage 
in  each  trade  based  on  its  investigations,  but  of  what  use 
is  it  all  if  employers  do  not  pay  the  prescribed  minimum  I 
The  Massachusetts  law  contains  no  other  sanction  which 
could  induce  employers  to  conform  to  the  rulings  of  the 
Minimum  Wage  Commission  save  that  of  high  ethical 
and  social  ideals  and  the  fear  of  losing  a  part  of  their 
trade.  But  it  is  not  at  all  clear  to  us  that  employers  feel 
themselves  bound  to  pay  a  minimum  wage  on  ethical  and 
social  grounds.  Most  employers  feel  that  they  are  doing 
all  that  they  are  obliged  to  do  when  they  pay  the  market 
rate  of  wages ;  they  feel  that  any  higher  rate  will  inter- 
fere with  their  business  and  deprive  them  of  their  lawful 
profits.  The  only  thing,  then,  that  can  induce  the  average 
Massachusetts  employer  to  conform  to  the  rulings  of  the 
Minimum  Wage  Commission  is  the  fear  of  losing  part  of 
his  trade.  It  must  not  be  forgotten,  of  course,  that  there 
are  a  number  of  employers  in  Massachusetts,  as  else- 
where, who  will  look  upon  the  payment  of  minimum  wage 
as  a  social  and  ethical  duty.  All  that  is  necessary  to 
induce  such  employers  to  pay  a  minimum  wage  to  their 
workers  is  to  bring  the  matter  before  them.  These  em- 
ployers, perhaps,  did  not  realize  that  the  wages  which 
they  were  paying  in  the  past  were  not  sufficient  to  main- 
tain their  workers  in  health  and  decency. 

The  commission  is  authorized  to  make  public  the 
names  of  those  who  comply  with  its  minimum  wage  rul- 
ings, and  it  is  contended  that  this  publicity  feature  will 


MINIMUM   WAGE   LEGISLATION   IN   MASSACHUSETTS  95 

compel  employers,  through  fear  of  losing  their  business, 
to  comply  with  the  rulings  of  the  commission.  Now  the 
extent  to  which  the  trade  of  the  employer  will  suffer  by 
reason  of  his  failure  to  pay  the  minimum  wage  will  de- 
pend partly  on  the  fact  whether  or  not  the  employer  is 
appealing  directly  to  the  patronage  of  the  public.  It 
seems  to  us  that  the  number  of  persons  who  are  inter- 
ested in  this  question,  if  we  except  those  directly  con- 
cerned, is  very  few.  Many  persons  would  read  the  daily 
newspapers  without  taking  any  notice  of  the  decrees  of  the 
commission.  And  even  of  those  who  might  notice  them, 
very  few  would  be  so  interested  as  to  take  away  their 
trade  from  the  employer  refusing  to  pay  the  minimum. 
The  majority  of  the  people  go  where  they  get  the  best 
service,  and  they  will  continue  to  do  so  unless  some  great 
change  comes  over  them.  Just  as  employers  aim  to 
get  the  highest  profit  from  their  invested  capital,  the 
public  aim  at  obtaining  the  greatest  amount  of  utilities 
and  satisfactions  out  of  the  money  which  they  expend. 
Another  fact  not  to  be  lost  sight  of  in  this  connection 
is  that  there  is  a  large  number  of  people  who  are  not 
yet  convinced  of  the  necessity  and  feasibility  of  mini- 
mum wage  legislation.  It  is  true  that  a  strong  and  well- 
organized  campaign  has  been  carried  on  during  the  past 
few  years  for  the  purpose  of  educating  the  public  on  its 
necessity  and  feasibility,  but  a  strong  and  well-organized 
campaign  has  been  also  carried  on  by  the  opponents  of 
minimum  wage  legislation  for  the  purpose  of  prejudicing 
the  public  against  it.  Even  though  we  suppose  that  the 
public  are  interested  in  and  alive  to  the  necessity  of 
minimum  wage  legislation,  still  there  are  a  great  many 
employers  who  do  not  appeal  directly  to  the  patronage  of 
the  public,  over  whom,  therefore,  public  opinion  exercises 
very  little  influence.  The  brush  manufacturer,  for  in- 
stance, does  not  appeal  directly  to  the  patronage  of  the 
public.  Persons  who  buy  brushes  at  retail  hardware 
stores  liave  no  means  of  finding  out  whether  or  not  the 


»e  A   LEGAL  MINIMUM   WAGE 

manufacturer  complied  with  the  minimum  wage  ruling. 
The  brush  manufacturer  does  not  even  depend  on  the 
retail  dealers  of  his  own  State  for  the  sale  of  his  prod- 
ucts. Most  of  his  products  are  sold  outside  the  State  in 
which  he  is  operating. 

When  we  come  to  harmonize  these  theoretical  assump- 
tions with  actual  facts  in  Massachusetts,  we  are  con- 
fronted with  a  great  difficulty.  We  find  it  difficult  to 
believe  that  a  voluntary  minimum  wage  law  can  be  really 
effective,  yet  it  seems  to  be  the  general  opinion  that  the 
rulings  of  the  Massachusetts  commission  in  the  brush 
industry  are  very  generally  observed.  In  a  recent  letter 
to  the  writer,  a  member  of  the  commission  says:  ''We 
have  just  completed  an  examination  of  the  workings  of 
the  minimum  wage  law  in  all  the  brush  factories  and  in 
every  brush  establishment  of  any  importance  the  mini- 
mum wage  is  being  paid. ' '  More  recently  we  have  heard 
of  workers  being  discharged  because  tliey  were  unable 
to  earn  the  minimum  wage.  In  spite  of  these  facts,  how- 
ever, and  we  have  no  reason  to  doubt  them,  we  are  still 
very  doubtful  about  the  effectiveness  of  a  voluntary 
minimum  wage  law.  If  Massachusetts  had  a  compulsory 
minimum  wage  law  for  the  past  three  years,  not  only 
the  1,800  brush  workers  but  also  the  women  in  all  the 
other  industries  in  the  State  would  in  all  probability  by 
this  time  be  receiving  living  wages.  The  effectiveness  of 
the  minimum  wage  ruling  in  the  brush  trade  may  be  due 
to  their  realization  of  the  fact  that  it  is  a  better  economic 
policy  to  pay  living  wages  to  their  workers  than  not,  or 
to  the  exceptional  efficiency  of  the  Massachusetts  com- 
mission. We  doubt  very  seriously  whether  the  ruling 
could  be  equally  effective  in  a  larger  industry,  especially 
where  there  is  a  strong  employers'  organization. 

The  Massachusetts  law,  however,  is  a  step  in  the 
right  direction.  Public  opinion  in  Massachusetts  is  in  all 
probability  not  yet  ripe  for  compulsory  minimum  wage 
legislation  and  the  present  law  will  undoubtedly  do  a 


MINIMUM   WAGE   LEGISLATION   IN   MASSACHUSETTS  97 

great  deal  towards  preparing  it  for  compulsory  legisla- 
tion. The  investigations  of  the  present  minimum  wage 
commission  must  inevitably  convince  the  public  of  the 
necessity  of  really  effective  minimum  wage  legislation. 
A  great  deal  has  been  already  done  by  the  Massachusetts 
law  in  the  formation  of  public  opinion  in  other  States. 
When  there  was  a  question  of  passing  minimum  wage 
laws  in  other  States,  their  advocates  have  been  able 
to  point,  and  with  considerable  effect,  too,  to  the  example 
of  Massachusetts,  one  of  the  most  advanced  States  in 
the  Union,  as  already  having  a  minimum  wage  law  on  its 
statute  books.  Until  quite  recently  the  non-compulsory 
feature  of  the  Massachusetts  law  does  not  seem  to  have 
attracted  much  attention.  What  attracted  the  attention 
of  the  ordinary  individual  who  wanted  to  see  something 
done  to  improve  the  condition  of  the  working  girls,  was 
that  Massachusetts  had  adopted  an  effective  means  to 
this  end  and  that  there  was,  therefore,  no  reason  why 
other  States  should  not  adopt  the  same  means. 

A  minimum  wage  law  following  almost  exactly  the 
same  lines  laid  down  by  the  Massachusetts  law  was 
passed  by  the  legislature  of  Nebraska  in  its  session  in 
1913.  The  Nebraska  law,  like  that  of  Massachusetts, 
made  provision  for  a  commission,  for  investigation  and 
for  wage  boards.  The  legislature,  however,  failed  to 
make  any  appropriation  for  the  administration  of  the 
law  and  thus  rendered  it  nugatory.  So  little  interest  did 
the  people  of  Nebraska  take  in  this  law  that  very  few  of 
them  know  of  its  existence. 


CHAPTER  X. 
THE  UTAH  MINIMUM  WAGE  LAW. 

Under  our  modern  minimum  wage  laws  the  State  does 
not,  as  a  general  rule,  determine  the  minimum  rate  of 
wages  to  be  paid  to  the  workers.  It  has  been  generally 
felt  that  on  account  of  the  different  needs  of  the  workers 
in  different  industries,  it  would  be  a  better  public  policy 
to  leave  the  fixing  of  the  minimum  rates  in  each  industry 
to  some  public  body  already  in  existence  or  specially 
created  for  this  purpose.  To  this  general  rule  the  mini- 
mum wage  law  of  Utah  is  a  notable  exception.  The  legis- 
lature of  this  State  has  fixed  certain  minimum  rates  of 
wages,  below  which  no  female  worker  may  be  employed. 
It  was  not  at  all  according  to  the  desires  of  the  State 
Federation  of  Women's  Clubs,  which  sponsored  the  Utah 
law,  that  the  wages  of  women  and  minors  should  be 
determined  in  this  arbitrary  manner.  The  federation 
had  a  law  drawn  up  and  introduced  into  the  State  legis- 
lature, a  law  similar  in  all  respects  to  the  laws  passed  in 
the  same  year  in  Oregon,  California,  Washington,  Minne- 
sota and  Wisconsin.  The  proposed  law  provided  for  a 
commission  with  full  power  of  inquiring  into  the  wages 
paid  to  women  and  girl  employes  in  the  various  occupa- 
tions in  which  they  were  engaged,  with  a  view  of  ascer- 
taining as  nearly  as  possible  the  adequacy  of  the  then 
prevailing  wages  to  supply  the  employes  with  the  neces- 
sary cost  of  living  and  to  maintain  them  in  efficiency. 
The  commission  was  also  to  be  authorized  to  establish 
a  wage  board  to  determine  minimum  wages  for  women  in 
occupations  in  which  the  present  wages  were  found  to 
be  inadequate  to  maintain  them  in  becoming  decency. 

In  this  form,  the  law  was  strongly  opposed  by  the 
merchants  and  manufacturers  of  the  State  of  Utah. 
They  were  especially  opposed  to  the  publicity  clauses  of 
the  bill,  which  would  give  the  commission  power  to  con- 

98 


THE   UTAH   MINIMUM   WAGE   LAW  99 

duct  investigations  into  their  business  and  publish  the 
results  of  these  investigations  in  the  daily  papers.  At 
the  public  hearings  before  the  House  Committee  on 
Labor,  the  arguments  for  and  against  the  law  were  dis- 
cussed by  the  representatives  of  employers  and  employes, 
but  neither  side  was  willing  to  make  any  modifications 
in  its  proposals.  At  length,  some  representatives  of  the 
employers  drafted  a  bill  which  was  accepted  as  a  com- 
promise. The  new  bill  did  not  provide  for  any  commis- 
sion or  wage  board.  It  simply  prescribes  a  specific  mini- 
mum wage  to  be  paid  by  all  employers  in  the  State  to 
women  and  minors  in  their  employment.  For  experi- 
enced adult  women  workers,  the  Utah  law  prescribes  a 
minimum  wage  of  $1.25  a  day;  for  adult  learners  and 
apprentices,  it  prescribes  a  minimum  wage  of  90  cents 
a  day,  and  for  female  workers  under  18  years  of  age,  75 
cents  a  day.  The  law  further  specifies  that  any  regular 
employer  of  female  workers  who  shall  pay  any  woman 
less  than  the  prescribed  minimum  shall  be  guilty  of  a 
misdemeanor.  The  administration  of  the  Utah  law  was 
placed  in  the  hands  of  the  Commissioner  of  Immigration, 
Labor  and  Statitstics,  and  for  this  purpose  the  commis- 
sioner was  authorized  to  employ  an  additional  deputy, 
who  was  to  be  a  woman,  at  a  salary  of  $800  a  year. 

The  Utah  law  became  effective  May  13,  1913.  ''The 
total  number  of  women  and  girls  in  Utah,"  according 
to  the  Commissioner  of  Immigration,  Labor  and  Statis- 
tics, ''coming  under  the  operations  of  the  law  numbered 
about  12,000. '  ""'^  Of  this  number,  about  6  per  cent,  were 
under  18  years  of  age,  and  about  10  per  cent,  were  classi- 
fied as  learners  and  apprentices.  The  majority  of  the 
employes  under  18  years  of  age  were  employed  as  cash 


""Utah  Minimum  Wage  Law  for  Females,  by  T.  Haines.  When  the 
commissioner  says  that  about  12,000  female  workers  come  under  the 
operation  of  the  law  he  is  evidently  referring  to  the  total  number  of 
female  employes  in  Utah.  According  to  the  census  reports,  the  total 
number  of  females  employed  in  the  State  of  Utah  is  15,806. 


100  A   LEGAL  MINIMUM   WAGE 

girls  and  wrappers  and  were  receiving  about  $4  a  weel 
The  minimum  wage  law  increased  the  wage  of  this  clas 
to  $4.50  a  week.    Girls  working  in  the  laundries  who  wei 
formerly  receiving  from  $6  to  $7  a  week  are  now  pa 
$7.50  a  week.     Chambermaids  in  hotels   and  roomin^, 
houses,  who  before  were  receiving  $1  a  day,  are  now 
receiving  $1.25. 

The  Utah  law  appears  to  be  a  really  effective  mini- 
mum wage  law,  according  to  the  commissioner  who  is 
charged  with  its  enforcement.  It  has  increased  the  wages 
of  several  thousand  employes. 

During  1914,  over  $8,000  was  collected  from  em- 
ployers as  arrears  of  wages.  In  order  to  have  employers 
pay  these  arrears  of  wages,  it  has  been  unnecessary  in 
most  instances  to  sue  them.  So  far,  only  seven  cases 
have  been  brought  before  the  courts  and  six  out  of  these 
have  been  decided  in  favor  of  the  employes.  One  case,  in 
which  the  proprietor  of  a  dressmaking  establishment  was 
convicted  of  paying  an  apprentice  $5  instead  of  $5.50, 
was  afterwards  appealed  to  the  Supreme  Court  of  the 
State,  on  the  ground  that  the  law  fixing  the  minimum 
wage  was  unconstitutional.  At  the  present  writing,  the 
case  is  still  pending  before  the  court. 

We  cannot  better  summarize  the  practical  effects  of 
the  Utah  minimum  wage  law  tlian  in  the  words  of  Mr. 
Haines,  Commissioner  of  Immigration,  Labor  and  Statis- 
tics of  the  State,  whose  office  is  charged  with  its  adminis- 
tration: *'It  (the  minimum  wage  law)  may  be  said  to 
have  been  instrumental  in  raising  the  wages  of  a  number 
of  women  and  girls  who  most  needed  the  additional  sums 
of  money  it  has  placed  in  their  hands.  It  has  not  in- 
creased the  payrolls  in  establishments  employing  any 
considerable  number  of  women  over  5  per  cent.  As  an 
offset  to  this,  most  employers  admit  that  they  have  ob- 
tained increased  efficiency,  because  proprietors  or  man- 
agers of  many  establishments  employing  a  large  number 
of  female  workers  immediately  preceding  the  date  of  this 


THE   UTAH    MINIMUM    WAGE   LAW  101 

law  becoming  effective,  made  the  occasion  an  opportunity 
for  heart-to-heart  talks  with  their  female  employes  to 
emphasize  the  fact  that  it  would  be  up  to  them  (the  em 
ployes)  to  make  good,  in  order  to  hold  their  positions. 
This  presentation  of  the  situation  is  alleged  to  have  a 
leavenous  effect  upon  quite  a  few  deficient  employes  who 
are  now  drawing  more  than  the  minimum  wage.  A  very 
small  number  of  women  and  girls  who  failed  to  produce 
the  results  fixed  as  necessary  were  dismissed  from  estab- 
lishments, but  most  of  them  found  other  work  for  which 
they  were  better  adapted  and  consequently  we  can  recall 
but  few  cases  where  a  woman  or  girl  has  been  utterly  de- 
prived of  employment  because  of  the  law." 

In  Utah  the  employers  have  not  lowered  the  wages  of 
the  better  paid  workers  in  order  to  compensate  for  the 
increase  granted  to  the  poorly  paid  workers.  On  this 
point  Mr.  Haines  remarks  that  of  the  12,000  workers 
coming  under  the  provisions  of  the  law,  he  had  not  been 
able  to  find  one  woman  or  girl  who  was  drawing  $7.50  at 
the  time  the  law  went  into  effect  whose  wages  have  suf- 
fered a  decrease.  ''The  situation  now  is,"  says  the  Com- 
missioner, "that  a  much  larger  number  of  employes  in 
Utah  are  drawing  a  wage  in  excess  of  the  highest  mini- 
mum wage  than  those  who  are  paid  the  legal  wage  itself. ' ' 


CHAPTEE  XL 

OTHER  AMEEICAN  COMPULSORY  MINIMUM 
WAGE  LAWS 

In  addition  to  Utah,  six  other  American  States,  Cali- 
fornia, Colorado,  Minnesota,  Oregon,  Washington  and 
Wisconsin,  passed  minimum  wage  laws  in  1913.  As  was 
already  noted,  these  laws  are  based  on  a  somewhat  dif- 
ferent principle  from  that  underlying  the  Utah  law.  In 
Utah,  the  State  directly  fixes  minimum  rates  of  wages 
for  female  workers.  In  the  other  States  having  com- 
pulsory minimum  wage  laws,  it  was  deemed  wiser  to  have 
the  legislature  lay  down  certain  general  standards  of 
wages  and  sometimes  of  hours  and  working  conditions, 
and  to  create  a  commission  for  the  purpose  of  interpret- 
ing and  applying  these  standards  in  each  industry.  Be- 
sides the  commission,  all  these  States,  except  Colorado, 
provided  for  wage  boards  or  conferences,  which  were  to 
aid  the  commission  in  interpreting  and  applying  the  gen- 
eral standards  laid  down  by  the  legislature. 

It  is  the  purpose  of  the  writer  in  this  section  to  make 
an  analysis  of  the  six  before-named  compulsory  mini- 
mum wage  laws.  With  this  purpose  in  view,  it  was 
thought  better  to  select  only  one  law,  that  of  Oregon,  and 
make  a  clear  analysis  of  it,  and  afterwards  to  point  out 
how  far  its  various  sections  agree  with,  and  how  they 
differ  from,  the  other  laws.  The  Oregon  law  has  been 
selected  because  it  was  the  first  of  the  compulsory  acts 
providing  for  a  commission  to  be  put  into  effect. 

The  title  of  the  Oregon  law  clearly  announces  its  pur- 
pose. It  reads:  ''An  act  to  protect  the  lives  and  health 
and  morals  of  women  workers,  etc."^°^  The  preamble 
states  why  women  and  minors  should  be  protected  and 
what  they  should  be  jirotected  against  in  this  particular 
instance:  "Whereas,  The  welfare  of  the  State  of  Oregon 


'"-Oregon  Laws,  1913,  Chap.  62. 
102 


AMERICAN   COMPULSORY  MINIMUM   WAGE   LAWS  103 

requires  that  women  and  minors  should  be  protected 
from  conditions  of  labor  which  have  a  pernicious  effect 
on  their  health  and  morals,  and  inadequate  wages  and 
unduly  long  hours  and  unsanitary  conditions  of  labor, 
have  such  a  pernicious  effect,  etc." 

Actuated  bj^  the  prevalent  opinion  that  the  employ- 
ment of  women  or  minors  for  inadequate  wages,  abnor- 
mally long  hours,  or  under  unsanitary  conditions  is 
detrimental  to  public  health  and  morality,  the  State  of 
Oregon  seeks  to  prohibit  such  things  within  its  borders. 
The  Oregon  law,  therefore,  lays  down  the  general  princi- 
ple that  "it  shall  be  unlawful  to  employ  women  or  minors 
in  any  occupation  within  the  State  .  .  .  for  unreasonably 
long  hours,  and  it  shall  be  unlawful  to  employ  women  or 
minors  in  any  occupation  .  .  .  under  such  surround- 
ings or  conditions — sanitary  or  otherwise — as  may  be 
detrimental  to  their  health  and  morals,  and  it  shall  be 
unlawful  to  employ  women  in  any  occupation  .  .  .  for 
wages  that  are  inadequate  to  supply  the  necessary  cost  of 
living  and  to  maintain  them  in  health,  and  it  shall  be 
unlawful  to  employ  minors  in  any  occupation  for  unrea- 
sonably low  wages.  "^"^ 

As  a  means  of  declaring  what  constituted  reasonable 
wages,  hours  and  working  conditions,  the  law  makes  pro- 
vision for  the  establishment  of  an  Industrial  Welfare 
Commission.  In  order  to  avoid  the  constitutional  diffi- 
culty in  regard  to  the  delegation  of  legislative  powers, 
the  legislature  of  Oregon  clearly  emphasizes  the  fact  that 
the  purpose  of  the  commission  was  not  to  legislate,  but  to 
"ascertain"  and  "declare."  In  regard  to  the  personnel 
of  the  Industrial  Welfare  Commission,  the  Oregon  law 
specifies  that  it  shall  consist  of  three  members,  one  repre- 
senting the  interests  of  the  employing  class,  one  repre- 
senting the  interests  of  employers,  and  one  who  shall 
work  for  the  interests  of  the  public  as  a  whole. 


'Oregon  Laws,  1913,  Chap.  62. 


104  A   LEGAL   MINIMUM    WAGE 

The  Oregon  commission  is  authorized  to  investigate 
the  wages,  hours  and  working  conditions  of  women  and 
minors  in  any  occupation  within  the  State.  If,  after  in- 
vestigation, the  commission  finds  any  substantial  number 
of  them  in  any  occupation  working  unreasonably  long 
hours,  for  inadequate  wages,  or  under  conditions  detri- 
mental to  their  health  and  morals,  it  is  authorized  to 
establish  a  conference  in  such  occupation,  consisting  of 
not  more  than  three  representatives  of  the  employers, 
three  of  employes  and  three  representatives  of  the  public, 
together  with  one  or  more  commissioners.  All  the  mem- 
bers of  such  a  conference  are  selected  by  the  commission. 
All  the  information  which  the  commission  possesses  in 
regard  to  the  industry  or  occupation  in  question  may  be 
transferred  to  the  conference.  After  further  investiga- 
tion, the  conference  makes  a  recommendation  to  the  com- 
mission in  regard  to  wages,  hours  and  working  condi- 
tions. 

After  receiving  a  recommendation  from  the  confer- 
ence in  regard  to  wages,  hours  and  conditions,  the  com- 
mission may  approve  or  disapprove  it  as  it  sees  fit.  If  it 
disapproves  the  recommendation  of  the  conference,  it 
may  submit  the  matter  again  to  the  same  or  a  new  con- 
ference. In  case  it  approves  the  recommendation,  it  is 
authorized  to  give  a  four  weeks'  notice  of  a  public  hear- 
ing, which  all  persons  interested  are  invited  to  attend. 
If,  after  the  public  hearing,  it  is  still  satisfied  that  the 
recommendation  of  the  conference  is  reasonable,  it  may 
issue  an  order  giving  it  the  force  of  law  and  making  it 
obligatory  on  all  employers  in  the  particular  trade  after 
a  period  of  sixty  days.  Any  violation  of  the  order  of 
the  commission  constitutes  a  misdemeanor  punishable  by 
a  fine  of  not  less  than  $25,  nor  more  than  $100,  or  im- 
prisonment in  the  county  jail,  or  both.  In  order  to  pre- 
vent as  far  as  possible  the  displacement  of  persons 
unable  to  earn  the  minimum,  the  Oregon  law  authorizes 
the  commission  to  grant  special  permits  to  the  old  and 


AMERICAN   COMPULSORY   MINIMUM    WAGE    LAWS  105 

physically  defective  employes,  allowing  them  to  work  f or 
less  than  the  minimum.  For  these  the  commission  is 
empowered  to  fix  special  rates  of  wages. 

The  provisions  of  the  Oregon  law  in  regard  to  the 
establishing  of  a  conference  and  the  holding  of  a  public 
hearing  refer  exclusively  to  adult  female  workers.  In 
the  case  of  minors,  the  commission  may,  after  investiga- 
tion, fix  minimum  rates  of  wages  without  establishing 
a  conference  or  holding  a  public  hearing. 

The  enforcement  of  the  Oregon  minimum  wage  law, 
in  a  great  measure,  devolves  on  the  Commissioner  of 
Labor.  This  official  has  his  deputies  in  the  various 
centers  in  the  State,  who  visit  the  factories  and  stores  m 
order  to  see  that  the  minimum  wage  law,  as  well  as  the 
other  labor  laws,  are  properly  observed.  When  the 
deputy  finds  that  the  workers  in  any  factory  or  store  are 
not  being  paid  the  amount  required  by  the  minimum  wage 
ruling,  he  tries  to  induce  the  employer  to  make  up  the 
deficit,  and  if  he  does  not  succeed,  he  brings  the  matter 
into  court.  The  commission  itself  also  makes  sure  that 
its  rulings  are  being  properly  observed,  and  for  this  pur- 
pose it  examines,  from  time  to  time,  the  payrolls  of 
employers.  But,  even  independent  of  the  Labor  Com- 
missioner or  the  Industrial  Welfare  Commission,  wage- 
earning  women  may  recover  the  full  amount  of  wages 
due  to  them  under  the  Oregon  rulings.  The  law  permits 
any  woman  worker,  who  has  been  paid  less  than  the  legal 
minimum,  to  collect  in  a  civil  action  the  difference  be- 
tween what  she  has  received  and  the  legal  minimum. 

The  minimum  wage  laws  of  California  and  Washing- 
ton are  practically  the  same  as  that  of  Oregon,  after 
which  they  are  modeled.  The  only  difference  of  any  con- 
sequence between  these  three  laws  is  that  whereas  those 
of  California  and  Oregon  regulate  wages,  hours  and 
working  conditions,  that  of  Washington  is  confined  to 
the  regulation  of  wages  and  working  conditions.  The 
Minnesota  minimum  wage  law,  also,  provides  for  tho 


106  A    LEGAL  MINIMUM   WAGE 

establishment  of  a  commission,  known  as  the  Minimum 
Wage  Commission.  Unlike  the  Oregon,  Washington  and 
California  commissions,  the  powers  of  the  Minnesota 
commission  are  confined  to  the  fixing  of  minimum  rates 
of  wages.  In  order  to  assist  it  in  this  work,  the  commis- 
sion may  set  up  an  advisory  board.  It  may,  however,  act 
independently  of  such  a  board  whenever  it  pleases.  It 
may  fix  minimum  rates  of  wages  without  having  recourse 
to  any  board,  and  even  after  the  board  has  made  a  recom- 
mendation, the  commission  may  fix  a  different  rate  of 
wages  from  that  which  has  been  recommended.  In  Wis- 
consin, the  administration  of  the  minimum  wage  rests 
with  the  Industrial  Commission  already  established  in 
that  State.  Like  the  Oregon  and  California  laws,  the 
Wisconsin  law  regulates  not  alone  wages  but,  also,  hours 
and  working  conditions.  In  Colorado,  the  whole  work 
of  investigating  and  determining  minimum  rates  of 
wages  is  done  by  one  State  wage  board,  which,  in  consti- 
tution and  functions,  corresponds  to  the  commissions  of 
other  States.  As  in  Oregon,  so,  also,  in  the  other  States, 
the  enforcement  of  the  minimum  wage  law  practically 
devolves  upon  the  Commissioner  of  Labor. 


CHAPTER  XII. 

THE  OREGON  MINIMUM  WAGE  LAW  BEFORE 
THE  COURTS. 

The  Oregon  minimum  wage  law,  like  every  other  form 
of  progressive  social  legislation  adopted  in  America,  had 
to  stand  the  test  of  the  courts.  It  was  the  first  compul- 
sory minimum  wage  law  of  its  kind  to  come  into  operation 
in  this  country.  It  was,  also,  the  most  carefully  drafted 
of  all  our  American  minimum  wage  laws,  and  had  been 
administered  conservatively  and  worked  smoothly.  For 
these  reasons,  the  advocates  of  minimum  wage  legisla- 
tion were  glad  to  have  a  test  case  made  of  the  Oregon  law 
so  that  the  courts  might  have  an  opportunity  of  finally 
pronouncing  upon  this  new  form  of  legislation. 

Not  long  after  Order  No.  1,  fixing  the  minimum  wage 
for  experienced  adult  women  workers  in  the  manufactur- 
ing establishments  in  Portland,  at  $8.64  a  week,  had  gone 
into  efifect,  Mr.  Frank  C.  Stettler,  a  paper  box  manufac- 
turer, petitioned  the  district  court  of  the  county  of  Mult- 
nomah, in  which  Portland  is  situated,  for  a  permanent 
restraining  order  to  prevent  the  commission  from  enforc- 
ing the  order.  The  plea  for  the  injunction  was  based  on 
the  following  grounds  at  law:  It  was  claimed,  in  the  first 
place,  that  the  minimum  wage  law  deprives  the  plaintiff 
of  his  property  and  liberty  without  due  process  of  law; 
secondly,  that  it  denies  the  plaintiff  equal  protection  of 
the  law;  thirdly,  that  it  provides  for  the  taking  of  the 
property  of  the  plaintiff  without  just  or  any  compensa- 
tion ;  fourthly,  that  it  denies  and  deprives  the  plaintiff  of 
the  right  to  have  the  order  of  the  commission  judicially 
reviewed  and  determined ;  fifthly,  that  it  attempts  to  dele- 
gate legislative  powers  to  a  commission. 

The  district  court  refused  to  grant  the  petition  of  the 
plaintiff  on  any  or  all  of  these  grounds,  whereupon  the 
case  was  appealed  to  the  Supreme  Court  of  the  State  of 

107 


108  A   LEGAL  MINIMUM   WAGE 

Oregon.  On  March  17,  1914,  the  Oregon  Supreme  Court 
handed  down  a  decision  upholding  the  decision  of  the 
lower  court. 

The  real  purpose  of  the  suit  before  the  Oregon  Su- 
preme Court  was  to  determine  whether  or  not  the  legal 
regulation  of  the  wages  of  women  workers  conflicted  with 
Section  1,  of  the  Fourteenth  Amendment  to  the  Federal 
Constitution^''*  and  Section  20,  Article  1,  of  the  Oregon 
Constitution.  Before  coming  to  the  real  question  at  issue, 
the  court  made  a  review  of  the  recent  trend  of  judicial 
opinion  in  regard  to  the  regulation  of  hours  of  women 
workers.  It  cited  the  decision  of  the  United  States  Su- 
preme Court  upholding  the  Oregon  10-hour  law  for 
working  women,  in  order  to  show  that  the  courts  had  al- 
ready taken  cognizance  of  woman's  physical  weakness 
and  the  necessity  of  legislative  action  in  order  to  protect 
her  against  excessively  long  working  hours.  "  'That 
woman's  physical  structure  and  her  performance  of  her 
maternal  functions,'  "  said  the  court,  quoting  from  the 
Oregon  10-hour  decision,  "  'place  her  at  a  disadvant- 
age in  the  struggle  for  subsistence,  is  obvious.'  "  The 
court,  also,  emphasized  the  important  fact  that  legislation 
designed  for  women's  benefit  was  not  for  her  benefit 
alone,  but  for  the  benefit  of  the  race.  "  'The  limitations 
which  this  statute  places  upon  her  contractual  powers, 
upon  her  right  to  agree  with  her  employer,  as  to  the  time 
she  shall  labor,  are  not  imposed  solely  for  her  benefit  but 
also  for  the  benefit  of  all.  Many  words  cannot  make  this 
plainer.  .  .  .  This  difference  justifies  a  difference  in 
legislation  and  upholds  that  which  is  designed  to  com- 
pensate for  some  of  the  burdens  which  rest  upon  her.'  " 
"The  conditions  mentioned  in  the  above  quotation,"  the 


'""No  State  shall  make  or  enforce  any  law  which  shall  abridge  the 
privileges  or  immunities  of  the  citizens  of  the  United  States,  nor  shall 
any  State  deprive  any  person  of  life,  liberty,  or  property  without  due 
process  of  law  or  deny  to  any  person  within  its  jurisdiction  equal  pro- 
tection of  the  law." — From  the  Fourteenth  Amendment  of  the  Consti- 
tution of  the  United  States. 


THE  OREGON  LAW  BEFORE  THE  COURTS         109 

court  went  on  to  say,  "lie  at  the  foundation  of  all  legisla- 
tion attempted  for  the  amelioration  of  woman's  condition 
in  her  struggle  for  subsistence." 

All  the  laws  regulating  hours  and  working  conditions 
interfere  with  the  individual's  freedom  of  contract  just 
as  do  the  laws  regarding  the  manufacture  and  sale  of 
dynamite,  or  the  laws  prohibiting  the  manufacture  and 
sale  of  opium.  All  of  them  would  be  in  conflict  with  the 
Fourteenth  Amendment  of  the  Federal  Constitution  if 
they  were  not  justified  as  police  measures.  They  have 
been  upheld  by  the  courts  as  coming  within  the  power  of 
the  State,  sometimes  termed  its  police  power,  to  promote 
public  health,  welfare  and  morality  even  at  the  sacrifice 
of  certain  legal  rights  of  the  individual. 

As  to  whether  or  not  a  particular  measure  of  social 
reform  is  justified  on  the  grounds  of  public  health  and 
morality,  it  is  the  function  of  the  legislature  to  decide. 
The  legislature  is  supposed  to  be  a  faithful  register  of 
public  opinion;  it  is  supposed  to  be  acquainted  with  the 
wants  and  needs  of  the  people ;  it  is  supposed  to  know  the 
facts  upon  which  social  legislation  is  based.  A  free 
people  speak  through  their  legislature;  they  determine 
through  their  legislature  how  business  is  to  be  carried  on ; 
they  determine  what  kind  of  business  is  for  their  welfare 
and  what  is  not ;  they  determine  whether  free  contract  or 
regulation  is  the  better  method  of  determining  the  various 
conditions  of  the  labor  contract ;  the  number  of  hours  the 
laborer  is  to  work,  the  conditions  under  which  his  work  is 
to  be  carried  on  and  the  price  which  he  is  to  receive  for  it. 
If  a  free  people,  acting  through  their  legislature,  deter- 
mine that  a  certain  legislative  measure  is  designed  for  the 
conservation  of  public  health  and  public  welfare,  the  prob- 
ability is  that  this  measure  is  expedient,  and  the  courts 
cannot  interfere  except  on  the  grounds  that  the  object 
which  the  legislature  had  in  view  and  the  means  devised 
to  attain  it,  are  plainly  and  palpably  outside  the  bounds 
of  a  reasonable  public  policy.    This  is  an  opinion  of  long 


110  A    LEGAL   MINIMUM   WAGE 

standing  in  the  courts  and  one  that  is  supported  by  a 
great  weight  of  authority.  In  regard  to  it,  the  Oregon  de- 
cision says:  '^Granting  then  that  there  is  a  liberty  of 
contract  which  cannot  be  violated  even  under  the  sanc- 
tion of  direct  legislative  enactment,  but  assuming,  as 
under  settled  law  we  may  assume,  that  such  liberty  of 
contract  is  subject  to  such  regulations  as  the  State  may 
reasonably  prescribe  for  the  common  good  and  well-being 
of  society,  what  are  the  conditions  under  which  the  judi- 
ciary may  declare  such  regulations  to  be  in  excess  of  leg- 
islative authority  and  void?  Upon  this  point  there  is  no 
room  for  dispute  for  the  rule  is  universal  that  a  legisla- 
tive anactment,  Federal  or  State,  is  never  to  be  disre- 
garded or  held  invalid  unless  it  be  beyond  question  plainly 
and  palpably  in  excess  of  legislative  power." 

Many  of  the  States,  as  the  Oregon  court  intimated, 
have  determined  that  legal  regulation  of  the  hours  of 
working  women  is  justifiable  and  necessary  on  the 
grounds  of  public  policy,  and  the  acts  of  the  legislatures 
in  this  matter  have  been  always  upheld  by  the  courts  with 
the  single  exception  of  Illinois  where  a  10-hour  law  was 
first  held  unconstitutional  by  the  supreme  court. 

But  even  the  Illinois  court  has  found  it  necessary  to 
reverse  itself  and  to  uphold  as  constitutional  a  similar  law 
passed  by  the  legislature  at  a  more  recent  date.  In  1913, 
the  legislature  of  Oregon  determined  that  the  regulation 
of  the  wages  of  working  women  was  also  justified  on  the 
grounds  of  public  policy.  The  act  of  the  legislature  was 
not  based  on  any  sudden  or  ephemeral  movement.  It  was 
based  upon  certain  well  authenticated  facts  which  had 
been  brought  to  the  attention  of  the  people  of  Oregon 
inside  of  the  past  three  or  four  years.  In  the  first  place 
there  was  the  fact  that  a  very  high  percentage  of  work- 
ing women  in  the  State  were  in  receipt  of  wages  that  were 
insufficient  to  maintain  them  in  health  and  efficiency. 
Secondly,  there  was  the  fact  based  upon  common  knowl- 
edge and  the  opinions  of  the  best  students  of  the  question 


THE  OREGON  LAW  BEFORE  THE  COURTS  111 

that  the  low  wages  of  women  workers  not  alone  interfere 
with  their  own  health  and  well-being  but  with  the  health 
and  well-being  of  the  community  as  a  whole.  The  States 
had  been  casting  around  for  a  remedy  for  this  evil  which 
was  menacing  the  health  and  well-being  of  their  citizens. 
In  the  wages  board  system  they  found  a  remedy  that  had 
operated  successfully  in  England  and  Australia.  This 
remedy  might  not  have  been  the  best  possible  remedy ;  the 
evidence  for  its  successful  operation  in  Australia  and 
England  might  not  have  been  convincing  to  many  minds. 
Furthermore  the  fact  that  this  remedy  had  operated  suc- 
cessfully in  the  above-named  countries  might  not  be  a 
sufficient  evidence  of  its  adaptability  to  American  condi- 
tions. All  this  might  have  been  true  and  yet  offer  no 
strong  proof  against  the  application  of  the  wages  board 
system  in  America.  It  is  by  experimenting  that  we  find 
remedies  for  our  physical  evil  and  it  is  by  experimenting 
also  that  we  must  discover  remedies  for  the  evils  of  our 
industrial  order.  No  man  can  tell  for  certain,  beforehand, 
how  any  law  is  going  to  work.  Every  new  law  is  a  thrust 
into  the  darkness  but  this  does  not  prevent  us  from  pass- 
ing new  laws,  it  does  not  prevent  the  process  of  social 
experimentation  from  going  on. 

In  the  low  wages  of  women  workers  we  have  a  real  evil 
for  which  the  State  is  as  much  bound  to  provide  a  remedy 
as  it  is  for  long  hours  and  unsanitary  working  conditions. 
''Every  argument  put  forward  to  sustain  the  maximum 
hours  law  upon  which  it  rests,"  says  the  Oregon  Supreme 
Court,  "applies  equally  in  favor  of  the  constitutionality 
of  minimum  wage  law  as  also  within  the  police  power  of 
the  State  and  as  a  regulation  tending  to  promote  public 
health,  and  morality."  This  opinion  was,  of  course, 
based  on  the  fact  that  there  existed  an  evil,  namely,  the 
evil  of  low  wages  for  which  the  State  was  bound  to  pro- 
vide a  remedy  and  also  on  the  fact  that  minimum  wage 
legislation  was  calculated  to  remedy  this  evil.  The  legis- 
lature had  determined  that  minimum  wage  legislation  was 


112  A   LEGAL   MINIMUM   WAGE 

an  effective  remedy  for  low  wages.  The  court  could  not 
say  that  the  legislature  was  wrong  in  its  determination. 
It  could  not  say  that  minimum  wage  legislation  had  no 
relation  whatsoever  to  the  evils  of  low  wages. 

Having  disposed  of  the  main  question  at  issue,  the 
court  went  on  to  consider  the  other  charges  brought  forth 
by  the  plaintiff.  It  was  charged  that  the  ruling  of  the 
commission  against  which  the  plaintiff  had  sued  for  an 
injunction,  was  discriminatory  in  that  it  applied  to  manu- 
facturers in  Portland  alone  to  the  exclusion  of  those  in 
other  parts  of  the  State  of  Oregon.  To  this  charge  the 
court  replied:  'Hhat  the  law  by  which  the  plaintiff  is 
bound  .  .  ,  applies  to  all  the  State  alike.  The  other  provi- 
sions of  the  act  are  for  the  purpose  of  ascertaining  for 
those  who  are  not  complying  with  it,  what  are  reasonable 
hours  of  labor  and  what  are  reasonable  wages  in  the  vari- 
ous occupations  and  localities  in  the  State."  The  ruling 
of  the  commission  was  applied  to  Portland  alone  because 
the  commission  had  found  a  substantial  number  of  the 
working  women  in  the  manufacturing  establishments  of 
that  city  receiving  wages  that  were  inadequate  to  main- 
tain them  in  health  and  efficiency,  a  condition  which  was 
not  yet  found  to  exist  in  the  other  parts  of  the  State  of 
Oregon.  The  plaintiff  also  charged  that  the  Oregon  law 
delegated  legislative  powers  to  a  commission.  This 
charge  was  disposed  of  by  the  fact  that :  the  Oregon  com- 
mission was  not  authorized  to  ''fix"  but  to  ''declare" 
reasonable  standards  of  wages,  hours  and  working  con- 
ditions for  women  in  the  different  industries  of  the  State. 
The  powers  of  the  commission  were  almost  exactly  like 
those  of  the  railroad  rate  commission.  In  both  cases  the 
law  laid  down  a  general  principle  which  the  commission 
was  to  interpret  and  apply  as  the  occasion  arose.  If, 
therefore,  the  laws  creating  railroad  rate  commissions 
were  constitutional,  there  is  no  reason  why  a  law  creat- 
ing a  commission  to  declare  standard  rates  of  wages, 
standard  hours  and  standard  working  conditions  should 


THE   OREGON   LAW   BEFORE   THE   COURTS  113 

be  held  iinconstitiitional.  This,  in  substance,  was  the 
view  of  the  Oregon  Supreme  Court  upon  the  question  of 
delegating  legislative  powers  to  a  commission. 

A  further  charge  made  by  the  plaintiff  was  that  the 
minimum  wage  law  denied  the  plaintiff  the  right  to  have 
the  reasonableness  of  the  order  judicially  reviewed  and 
determined,  which  it  was  claimed,  was  not  in  accordance 
with  due  process  of  law.  To  this  the  court  replied  that 
due  process  of  law  merely  requires  such  tribunals  as  are 
proper  to  deal  with  the  subject  in  hand,  reasonable  notice 
and  a  fair  opportunity  to  be  heard,  before  some  tribunal 
before  it  decides  the  issues  are  the  essentials  of  due  pro- 
cess of  law.  All  these  things  were  provided  for  by  the 
Oregon  law.  In  the  first  place,  the  law  authorized  the 
commission  to  make  an  investigation  of  wages,  hours  and 
working  conditions  of  women  in  the  different  trades.  Dur- 
ing the  course  of  this  investigation  public  hearings  are 
held  at  which  all  interested  persons  may  attend.  Secondly, 
the  law  provided  for  the  establishment  of  a  conference  in 
each  industry  consisting  of  an  equal  number  of  employers 
and  employes  together  with  some  representatives  of  the 
public  and  one  or  more  commissioners.  This  conference 
was  to  conduct  public  hearings  at  which  all  persons  in- 
terested might  attend.  Thirdly,  the  law  provides  for  pub- 
lic hearings  by  the  commission  on  the  reports  of  the  con- 
ferences at  which  all  persons  interested  may  also  at- 
tend. The  only  cases  in  which  an  appeal  may  be 
demanded  against  the  rulings  of  a  properly  consti- 
tuted commission  are  when  the  commission  has  acted 
outside  of  its  authority  or  when  its  rulings  are  con- 
fiscatory. On  this  point  the  Oregon  Supreme  Court 
quoted  at  length  from  a  Kentucky  railroad  case,  decided 
by  the  Supreme  Court  of  the  United  States.  The  plaintiff' 
in  the  case  had  attacked  the  orders  of  the  Kentucky  rail- 
road commission  because  they  were  final  and  conclusive 
without  the  right  of  appeal,  and  that  by  reason  thereof 
plaintiff  was  deprived  of  property  without  due  process  of 


114  A   LEGAL  MINIMUM   WAGE 

law.  In  deciding  this  question,  the  court  said:  "It  (the 
law)  required  a  hearing  and  a  determination  by  tlie  com- 
mission whether  the  existing  rates  were  excessive.  But 
on  those  conditions  being  fulfilled,  the  question  of  fact 
which  might  arise  .  .  .  would  not  become  as  such,  judi- 
cial questions  to  be  re-examined  by  the  courts." 

Shortly  after  the  petition  of  the  paper  box  manu- 
facturer had  been  denied  by  the  circuit  court  an  employe 
of  the  same  manufacturer  also  applied  for  an  injunction 
©n  the  ground  that  if  the  order  of  the  commission  was 
enforced  she  would  be  arbitrarily  deprived  of  her  em- 
ployment and  of  her  means  of  earning  a  livelihood.  This 
petition  was  also  denied  by  the  circuit  court.  The  case 
was  then  appealed  to  the  Supreme  Court  of  Oregon  on  the 
grounds  that  in  the  former  case  the  court  did  not  decide 
whether  or  not  the  minimum  wage  act  contravened  Sec- 
tion 1  of  the  Fourteenth  Amendment  to  the  Federal  Con- 
stitution which  provides:  "No  State  shall  make  or  enact 
any  law  which  shall  abridge  the  privileges  or  immunities 
of  citizens  of  the  United  States."  On  this  question  the 
court  went  on  to  say  that  while  this  clause  is  not  speci- 
fically referred  to  in  the  former  decision  it  was  certainly 
intended  by  that  opinion  to  express  the  conviction  of  this 
court  that  the  act  in  question  violated  no  precept  of  the 
Fourteenth  Amendment.  In  the  previous  case  the  court 
decided  that  the  State  had  the  power  of  prohibiting  the 
employment  of  women  and  minors  for  abnormally  long 
hours,  for  unreasonably  low  wages,  or  under  conditions 
detrimental  to  their  health  and  morality,  and  since  this 
was  the  case,  no  citizen  could  claim  it  as  a  right  or  im- 
munity to  employ  women  or  minors  under  these  condi- 
tions. Referring  specifically  to  Section  1  of  the  Four- 
teenth Amendment  to  the  Federal  Constitution,  the  court 
said  that  it  was  thought  expedient  to  make  the  general 
Government  (through  this  amendment)  a  coguaranteer 
with  the  States  of  these  fundamental  privileges  of  free 
men.     But  that  the  effect  of  this  would  be  to  limit  the 


THE  OREGON  LAW  BEFORE  THE  COURTS  115 

power  of  the  States  to  enact  reasonable  laws  for  the  pro- 
tection of  their  women  and  children  against  the  conse- 
quences of  labor  for  a  length  of  time  tending  to  impair 
health  or  at  a  wage  barely  sufficient  to  sustain  life,  never 
entered  the  imagination  of  the  statesman  who  framed  it. 
From  the  decisions  of  the  Supreme  Court  of  Oregon, 
the  paper  box  manufacturer  of  Portland  and  his  employe 
have  taken  a  joint  appeal  to  the  Supreme  Court  of  the 
United  States.  On  December  11, 1914,  the  case  was  argued 
by  the  counsel  on  each  side  and  a  decision  is  soon  ex- 
pected. If  this  decision  is  favorable,  it  will  give  a  great 
impetus  to  the  minimum  wage  movement  in  this  country. 


CHAPTER  XIII. 

SOME  OBJECTIONS  TO  MINIMUM  WAGE  LEGIS- 
LATION CONSIDERED. 

The  first  and  most  frequent  objection  urged  against 
minimum  wage  legislation  for  women  and  minors  in  this 
country  is  that  they  do  not  need  a  living  wage.  Employers 
freely  admit  that  the  wages  paid  to  a  fairly  large  per- 
centage of  women  workers  are  not  sufficient  to  maintain 
them  in  health  and  decency,  but  they  contend  that  the 
majority  of  them  live  at  home  and  normally  expect  to  de- 
pend on  their  families  for  support.  But  putting  aside  for 
the  moment  the  question  of  the  working  women  living  at 
home,  we  still  have  the  important  question  in  regard  to 
those  who  have  no  homes,  and  who  must  depend  either  on 
wages  or  public  charity  for  support.  All  the  investigation 
of  the  wages  of  women  workers  in  this  country  in  recent 
years  show  that  a  fairly  large  percentage  of  them  are 
living  away  from  home.  The  United  States  Bureau  of 
Labor  Statistics  in  its  elaborate  report  in  1911,  on  Women 
and  Child  Wage-earners  in  this  country,  showed  that  of 
the  women  employed  in  the  department  stores  in  Boston, 
Chicago,  Minneapolis,  St.  Paul,  New  York,  Philadelphia 
and  St.  Louis,  seven  cities  in  all,  28.2  per  cent,  lived  away 
from  home.  The  percentage  living  away  from  home  in 
some  cities  was  higher  than  this  general  average,  while 
in  others  it  was  considerably  lower.  In  Boston  it  rose 
as  high  as  38.8  per  cent.,  while  in  New  York,  it  was  7.9 
per  cent.  The  New  York  Factory  Investigating  Commis- 
sion found  that  of  the  women  employed  in  the  paper  box 
industry  in  the  city  of  New  York,  64  per  cent,  lived  at 
home,  19  per  cent,  lived  with  relatives  and  17  per  cent, 
lodged  with  strangers.  These  workers  living  away  from 
home  evidently  need  a  living  wage  and  it  is  much  to  be 
desired  that  they  receive  one. 

116 


SOME    OBJECTIONS   TO   LEGISLATION   CONSIDERED  117 

But  the  need  of  a  living  wage  is  not  confined  exclu- 
sively to  working  women  living  away  from  home.  It  is 
a  fact  of  common  knowledge  that  a  large  percentage  of 
women  workers  belong  to  families  of  very  modest  in- 
comes. Sometimes  the  working  girl  is  the  only  support 
of  the  family.  More  frequently  she  has  to  help  the 
father  who  is  receiving  low  wages,  to  maintain  a  house- 
hold of  four  or  five  members.  In  such  a  case  it  is  highly 
desirable  that  she  earn  at  least  her  own  living. 

While  it  is  a  general  impression  that  a  fairly  large 
percentage  of  women  wage-earners  living  at  home  can- 
not expect  to  depend  on  the  families  for  partial  support, 
we  cannot  tell  exactly  how  far  this  condition  actually 
exists  for  our  information  in  regard  to  the  economic 
conditions  of  families  of  working  women  is,  indeed,  very 
meagre.  The  Massachusetts  Commission  on  Minimum 
Wage  Boards  and  the  New  York  Factory  Investigating 
Commission  devoted  some  attention  to  this  point.  The 
Massachusetts  commission  found  that  87  per  cent,  of  the 
candy  workers  in  the  State  belonged  to  families  with  one 
other  wage-earner  besides  the  candy  worker  and  14.6  per 
cent,  belonged  to  families  with  no  other  wage-earner  be- 
sides the  candy  worker.  The  New  York  Factory  Inves- 
tigating Commission  in  its  investigation  of  the  women 
wage-earners  in  the  paper  box  industry  in  the  city  of 
New  York  found  that  out  of  156  families  of  paper  box 
workers  eight  had  no  other  wage-earner  in  the  family 
besides  the  paper  box  worker.  Forty-five  had  only  one 
other  wage-earner,  and  forty-three  had  only  two  other 
wage-earners  besides  the  paper  box  worker.  As  regards 
the  desirability  of  a  living  wage  for  workers  who  belong 
to  families  with  no  other  wage-earner  there  cannot  be  any 
question.  If  these  working  women  do  not  receive  a  living 
wage  both  they  themselves  and  their  families  must  suffer, 
but  it  is  not  at  all  evident  from  the  above  figures  that  the 
women  workers  who  belong  to  families  with  one  other 
wage-earaer  suffer  hardships  and  privations  by  reason 


118  A   LEGAL  MINIMUM   WAGE 

of  the  fact  that  they  do  not  receive  living  wages.  The  op- 
ponent of  minimum  wage  legislation  may  contend  that 
the  low  wages  of  the  working  girl  are  offset  by  the  high 
^v^ages  of  her  father  or  brother  and  it  must  be  admitted 
that  we  have  no  exact  information  by  means  of  which 
we  may  refute  this  contention.  The  New  York  Commis- 
sion has  collected  some  information  on  this  point  which 
is  highly  suggestive  but  not  conclusive.  The 'commission 
found  that  out  of  ninety-eight  families  ofj  paper  box 
workers  in  regard  to  whom  it  obtained  specilfic  informa- 
tion, eleven  had  an  income  of  less  than  $12.00  a  week; 
fifteen  had  an  income  of  less  than  $13.00  a  week ;  twenty 
had  an  income  of  less  than  15.00  a  week,  and  fifty 
had  an  income  of  less  than  $25.00  a  week.^''^  This  informa- 
tion, however,  is  lacking  in  one  essential;  it  does  not 
show  that  the  poorly  paid  workers  belonged  to  the  fami- 
lies with  small  incomes. 

A  second  objection  urged  against  minimum  wage  leg- 
islation by  its  opponents  is  that  it  will  lead  to  the  displace- 
ment of  the  workers  who  are  not  worth  the  minimum. 
The  opponents  of  minimum  wage  legislation  claim  that  it 
is  better  to  have  these  workers  employed  for  less  than  a 
living  wage  than  to  have  them  thrown  out  of  employment 
altogether  and  made  public  charges.  The  displacement 
brought  about  by  minimum  wage  legislation,  it  is  claimed, 
will  be  all  the  more  serious  if  the  minimum  is  fixed  at  a 
high  point  as  must  happen  if  a  personal  living  wage  is  to 
be  secured  for  the  worker  and  especially  if  a  family  living 
wage  is  to  be  secured.  This  objection  may  be  deprived  of 
a  good  deal  of  its  force  and  the  displacement  of  the  less 
efficient  workers  may  be  minimized  in  three  ways.  In  the 
first  place,  the  displacement  may  be  minimized  by  fixing 
the  minimum  first  at  a  low  point  and  by  giving  industry 
a  chance  of  readjusting  its  working  force  to  this  first 
change  before  a  higher  rate  is  fixed.    Secondly,  it  may  be 

'"'^Third  Report  of  the  New  York  Factory  Investigating  Commis- 
sion.   Appendix  II,  p.  150. 


SOME   OBJECTIONS   TO   LEGISLATION   CONSIDERED  119 

minimized  by  making  provision  for  the  granting  of  spe- 
cial permits  to  the  aged,  infirm  and  the  slow  workers,  al- 
lowing them  to  work  for  less  than  the  minimum.  Thirdly, 
the  displacement  might  be  minimized  by  having  a  grad- 
uated scale  of  wages  for  apprentices  such  as  is  provided 
for  by  the  Washington  Industrial  Welfare  Commission. 
The  rules  of  the  Washington  Commission  provide  that  a 
wage  of  not  less  than  $6.00  a  week  shall  be  paid  to  each  ap- 
prentice in  the  mercantile  stores  during  the  first  six 
months'  period  of  employment  of  such  apprentice,  and  a 
wage  of  not  less  than  $7.50  shall  be  paid  to  an  apprentice 
during  the  second  six  months'  period  of  employment  of 
such  apprentice. 

A  prominent  economist  in  reply  to  the  writer's  ques- 
tions in  regard  to  the  feasibility  and  effects  of  minimum 
wage  legislation,  expressed  the  opinion  that  the  two 
causes  of  low  wages  were  an  over-supply  of  workers  in 
certain  industries  and  inefficiency.  In  regard  to  the  con- 
tention of  this  economist,  it  may  be  said  that  some  of  the 
most  important  results  of  minimum  wage  legislation  will 
be  to  counteract  these  two  causes  of  low  wages.  In  the 
first  place,  minimum  wage  legislation  will  regulate  the 
supply  of  workers  in  each  industry.  The  Oregon  Indus- 
trial Welfare  Commission  restricts  the  number  of  per- 
sons entering  each  trade  by  fixing  a  minimum  wage  for 
apprentices.  The  Washington  Commission  goes  further 
in  this  matter  than  that  of  Oregon.  Not  only  does  it  regu- 
late the  wage  of  apprentices  but  it  limits  the  percentage 
of  apprentices  in  each  establishment.  A  circular  issued 
on  April  28,  1914,  by  the  Washington  commission  defines 
its  policy  in  regard  to  the  regulation  of  aj^prenticeship  in 
the  mercantile  stores.  Clause  4  of  the  circular  reads  as 
follows : 

''No  license  shall  be  valid  in  any  mercantile  estab- 
lishment where  more  than  17  per  cent,  of  the  total  num- 
ber of  adult  female  employes  are  apprentices  nor  where 
more  than  50  per  cent,  of  such  apprentices  are  receiving 


120  A   LEGAL  MINIMUM   WAGE 

less  than  a  weekly  wage  of  $7.50."  (  This  is  the  weekly 
wage  to  apprentices  during  the  second  six  months'  period 
of  their  apprenticeship). 

In  the  second  place,  minimum  wage  legislation  will 
improve  the  efficiency  of  the  workers.  By  displacing  the 
least  efficient  workers,  it  will  call  public  attention  to  their 
inefficiency  and  will  thereby  induce  the  State  to  make 
proper  provision  for  them.  If  the  inefficiency  of  the 
workers  is  due  to  lack  of  proper  training,  it  will  be  the 
duty  of  the  State  through  its  educational  institutions  to 
provide  such  training  for  them.  In  so  far  as  the  ineffi- 
ciency of  the  workers  is  due  to  certain  ineradicable  phyi- 
cal  or  mental  defects,  it  will  be  the  duty  of  the  State  to 
make  some  special  provision  for  them.  At  the  present 
time  the  inefficient  workers  demoralize  the^abor  market 
in  that  they  induce  employers  to  place  a  pi^emium  rather 
on  numbers  than  on  the  quality  of  their  labor  and  pre- 
vent the  workers  of  ordinary  efficiency  from  getting  a 
sufficient  return  for  their  labor.  It  ought  to  be  counted  an 
advantage  rather  than  a  disadvantage  of  minimum  wage 
legislation,  if  it  drives  the  hopelessly  inefficient  workers 
from  the  labor  market  and  forces  society  to  do  its  duty  to- 
wards them. 

The  experience  of  England  and  Australia  does  not 
warrant  us  in  believing  that  minimum  wage  legislation 
at  least  in  the  form  in  which  it  is  being  adopted  in  Amer- 
ica, will  create  any  very  serious  unemployment  problem. 
When  the  Victoria  law  first  went  into  effect,  it  seems  to 
have  displaced  a  number  of  inefficient  workers  and  even 
Tip  to  the  present  time,  the  inefficient  workers  create  a 
large  problem  for  the  wages  boards  of  that  State.  In  this 
regard,  however,  it  is  well  to  remember,  that  Victoria  took 
a  wide  and  sudden  sweep  into  the  field  of  wage  regulation 
without  giving  the  industrial  and  educational  institu- 
tions of  the  country  a  chance  to  readjust  themselves. 
Such  a  sudden  sweep  into  the  field  of  wage  regulation 
was  bound  to  have  its  evil  effects  if  the  State  was  not 


SOME   OBJECTIONS   TO   LEGISLATION   CONSIDERED  121 

prepared  to  make  immediate  provision  for  the  inefficient 
\rorkers.  With  the  conservative  methods  of  procedure 
adopted  in  England  and  this  country,  there  is  not  the 
same  danger  of  a  sudden  displacement  of  the  inefficient 
workers.  But  no  matter  how  conservatively  we  proceed, 
the  minimum  wage  legislation,  if  it  is  to  be  really  effec- 
tive, will  displace  some  inefficient  workers. 

As  to  the  precise  results  of  this  legislation  in  displac- 
ing the  inefficient  workers,  it  is  too  soon  as  yet  to  form 
any  definite  conclusion.  The  Utah  law  by  which  the  legis- 
lature directly  fixed  the  minimum  rates  of  wages  to  be 
paid  to  female  workers  went  into  effect  May  13,  1913. 
The  first  ruling  of  the  Oregon  Industrial  Welfare  Com- 
mission went  into  effect  October  4,  1913,  and  the  first 
ruling  of  the  Washington  Commission  went  into  effect 
June  24,  1914.  As  regards  the  effects  of  the  Utah  law  in 
displacing  the  less  efficient  workers,  the  Commissioner  of 
Immigration,  Labor  and  Statistics,  writes:  ''A  very 
small  number  of  women  and  girls  who  failed  to  produce 
the  results  fixed  as  necessary  were  dismissed  from  estab- 
lishments, but  most  of  them  found  other  work,  for  which 
thej^  were  better  adapted  and  consequently  we  can  recall 
but  few  cases  where  a  woman  or  girl  has  been  utterly  de- 
prived of  employment  because  of  the  law."  Some  em- 
ployers in  Portland  claim  that  the  Oregon  law  has  com- 
pelled them  to  discharge  a  number  of  inefficient  workers. 
Thus  one  employer  writing  to  us  about  the  beginning  of 
last  December,  says :  "When  the  minimum  wage  law  first 
took  effect  it  was  necessary  for  us  to  discharge  a  few  of 
our  girls,  owning  to  their  utter  inability  to  make  near  the 
minimum  wage.  We  have  kept  a  number  of  semi-efficient 
girls  in  the  hope  that  the  United  States  Supreme  Court 
may  decide  in  our  favor."  Another  Portland  employer, 
writing  to  us  about  the  same  date,  declared  that  "during 
the  past  year  quite  a  number  of  inefficient  employes  had 
been  discharged  and  that  quite  a  number  of  the  inex- 
perienced help  had  quit  because  they  felt  that  they  should 


122  A    LEGAL  MINIMUM   WAGE 

be  paid  the  minimum  regardless  of  their  efficiency."  In 
Washington  and  Oregon  as  in  all  the  other  States  a  large 
number  of  persons  have  been  thrown  out  of  employment 
during  the  course  of  the  past  year  owing  to  the  general 
business  depression.  In  such  circumstances,  of  course, 
the  inefficient  workers  would  be  the  first  to  be  displaced. 
This  makes  it  very  difficult  to  tell  how  far  the  displace- 
ment of  the  inefficient  workers  in  Washington  and  Oregon 
during  the  past  year,  has  been  due  to  minimum  wage  leg- 
islation. On  this  point,  the  secretary  of  the  Oregon  In- 
dustrial Welfare  Commission,  Miss  Caroline  Gleeson,  in 
a  recent  letter  to  the  writer,  says:  '*It  is  very  difficult 
to  decide  exactly  what  the  effect  of  the  law  has  been  in  the 
displacement  of  workers  because  of  the  financial  depres- 
sion which  has  thrown  a  great  many  out  of  work."  The 
secretary  of  the  Washington  Industrial  Welfare  Commis- 
sion in  a  recent  letter  also  says:  "It  may  be  that  to  a 
limited  extent  the  new  law  is  displacing  the  less  efficient." 
In  the  same  letter,  however,  the  secretary  says,  "we 
note  through  applications  for  apprenticeship  licenses  in 
various  industries  that  girls  who  were  formerly  employed 
in  mercantile  establishments  are  now  seeking  employ- 
ment in  factories  and  that  those  formerly  employed  in 
factories  are  now  employed  in  laundries."^'"'  There 
seems,  therefore,  to  be  no  ground  for  fearing  that  the 
minimum  wage  laws  will  cause  a  sudden  displacement 
of  the  less  efficient  workers.  In  so  far  as  displacement 
may  take  place  it  will  be  slow  and  gradual,  A  premium 
will  be  placed  upon  efficiency  and  society  will  be  aroused 
to  the  necessity  of  bringing  the  inefficient  workers  up  to 
the  standards  demanded  by  the  minimum  wage  rulings. 


'"»The  Washington  Industrial  Welfare  Commission  in  its  First  Bien- 
nial Report  recently  issued,  makes  the  following  statement  in  regard 
to  the  effects  of  minimum  wage  legislation  in  the  mercantile  establish- 
ments, laundries,  and  telephone  exchanges  of  the  State.  "There  has 
been  no  wholesale  discharge  of  women  employes,  no  wholesale  leveling 
of  wages,  no  wholesale  replacing  of  higher  paid  workers  by  cheaper 
help,  no  tendency  to  make  the  minimum  the  maximum."  (Report, 
p.  13). 


SOME   OBJECTIONS   TO   LEGISLATION   CONSIDERED  123 

The  U.  S.  Bureau  of  Labor  Statistics  has  recently  made 
a  study  of  the  effects  of  the  Oregon  law.  This  report  is 
expected  to  appear  shortly. 

A  third  objection  which  is  sometimes  urged  against 
minimum  wage  legislation  is  that  it  does  not  take  into 
account  the  value  of  the  service  rendered;  that  it  fixes 
a  flat  rate  of  wages  for  all  employes  independent  of  the 
value  of  their  labor.  Now  this  objection  is  only  par- 
tially valid.  In  the  first  place,  nearly  all  minimum  wage 
laws  fix  lower  rates  of  wages  for  learners  and  apprentices 
and  they  also  make  special  provision  for  those  who  b}^ 
reason  of  age  or  infirmity  are  unable  to  earn  the  legal 
minimum.  Secondly,  the  rate  fixed  by  a  minimum  wage 
commission  is  only  a  minimum  rate  and  all  employers  are 
free  to  dismiss  persons  not  able  to  earn  the  minimum. 
It  is  to  be  expected  as  we  shall  see  in  discussing  another 
objection  to  minimum  wage  legislation  that  competition 
will  still  continue  to  influence  the  wages  of  the  more 
efficient  workers  and  will  raise  them  above  the  legal  mini- 
mum. Thirdly,  minimum  wage  will  compel  employers  to 
exact  from  their  employes  standards  of  performance 
commensurate  with  the  increase  of  wages  granted  to  them. 

With  all  these  qualifications,  it  must  be  admitted  that 
there  is  some  force  in  this  objection  urged  by  the  oppo- 
nents of  minimum  wage  legislation.  But  the  same  objec- 
tion can  be  urged  with  equal  or  even  greater  force  against 
any  trade  union  scale  of  wages.  Any  general  time  scale 
of  wages  cannot  take  into  account  the  variations  of  effi- 
ciency in  the  individual  workers  and  it  is  even  doubtful  if 
it  can  take  into  account  the  various  grades  of  efficiency 
among  the  different  classes  of  workers  in  the  same  trade. 
Some  trade  unions  have  a  differential  for  the  different 
grades  of  efficiency  among  their  members,  but  the  major- 
ity of  them  are  opposed  to  it,  for  the  reason  that  it  offers 
an  inducement  to  employers  to  employ  the  less  efficient 
workers. 


/        124  A   LEGAL  MINIMUM    WAGE 

A  fourth  objection  often  advanced  to  minimum  wage 
legislation  is  that  it  cannot  be  maintained  in  seasons  of 
depression.  To  this  objection,  it  may  be  answered,  in  the 
first  place,  that  the  trade  unions  succeed  fairly  well  in 
maintaining  their  standard  rates  of  wages  through  sea- 
sons of  business  depression,  but,  of  course,  with  consid- 
erable unemployment.  Secondly,  it  may  be  a  better  eco- 
nomic policy  to  maintain  the  efficiency  of  such  as  continue 
employed  even  in  seasons  of  depression.  This,  of  course, 
may  entail  an  immediate  loss  to  employers  but  it  is  a 
loss  that  can  be  easily  made  up  in  seasons  of  prosperity. 
Some  of  the  employers  in  the  clothing  industry  have  been 
trying  to  cut  down  their  labor  supply  in  the  course  of  the 
past  year  for  they  feel  that  they  can  obtain  better  service 
if  they  keep  a  certain  number  of  workers  steadily  em- 
ployed than  by  keeping  a  large  number  of  workers  on 
their  hands  to  whom  they  can  give  employment  only  for  a 
part  of  the  year.  This  very  question  was  the  cause  of  a 
bitter  strike  in  the  clothing  trade  in  Baltimore  last  year. 
A  large  clothing  establishment  of  that  city  laid  off  a 
number  of  its  employes  for  the  purpose,  it  was  asserted, 
of  giving  steady  employment  to  the  remainder.  A  third 
answer  to  this  objection  is  that  the  rates  fixed  by  the 
board  may  be  lowered  in  seasons  of  depression  if  the  con- 
ditions of  business  demand  it.  Rates  previously  fixed  by 
the  boards  have  been  sometimes  lowered  by  subsequent 
action  of  the  boards  and  court  in  Victoria  and  there  is 
no  reason  why  the  same  should  not  be  done  under  our 
laws.  The  California  law  specifically  provides  that  the 
commission  may  upon  j^etition  of  employers  or  employes 
rescind  or  amend  any  previous  order.  The  Washington 
law  provides  that  the  commission  may  upon  petition  of 
employers  or  employes,  reconvene  the  former  confer- 
ence or  call  a  new  one  for  the  purpose  of  reconsidering 
the  rates  fixed  in  the  trade.  The  Massachusetts,  Minne- 
sota and  Nebraska  laws  contain  similar  provisions.  These 


SOME   OBJECTIONS   TO   LEGISLATION   CONSIDERED  125 

provisions  leave  room  for  the  revision  of  the  minimum 
rates  when  the  conditions  of  business  demand  it. 

A  fifth  objection  urged  against  minimum  wage  legisla- 
tion is  that  industries  of  the  State  passing  a  mimimum 
wage  law  will  be  placed  at  a  disadvantage  as  compared 
with  the  industries  of  other  States  not  having  such  a  law. 
This  same  objection  has  been  urged  against  all  social  leg- 
islation in  our  advanced  States.  It  was  urged  against 
the  hours  legislation  and  against  legisation  regulating 
working  conditions.  When  minimum  wage  legislation 
was  proposed  in  England  in  1907-1908,  it  was  asserted  by 
those  opposed  to  it  that  it  would  impose  too  heavy  a 
burden  on  English  industry,  and  that  consequently  there 
was  a  grave  danger  lest  her  competitors  might  be  able 
to  beat  England  in  the  race  for  commercial  supremacy. 
Minimum  wage  rulings  have  now  been  in  operation  in 
England  from  three  to  four  years,  but  the  results  pre- 
dicted by  the  adversaries  of  minimum  wage  legislation 
have  apparently  not  followed.  On  this  point,  the  Board 
of  Trade  in  reply  to  some  questions  recently  put  to  them 
by  the  New  York  Factory  Investigating  Commission  de- 
clare "that  they  are  not  aware  of  any  tendency  on  the 
part  of  the  manufacturers  to  transfer  their  business  to 
foreign  countries  (as  a  result  of  the  minimum  wage  law) 
or  in  the  case  where  lower  minimum  rates  have  been 
feared  for  Ireland,  to  transfer  their  business  to  Ire- 
land.'"" In  this  regard,  however,  it  is  well  to  remember 
that  the  short  time  for  which  the  minimum  wage  rulings 
have  been  in  effect  as  well  as  the  low  rates  fixed  by  the 
boards  render  the  English  experience  with  minimum 
wage  legislation  less  valuable  than  it  otherwise  might  be. 

There  seems,  then,  to  be  no  grave  reason  for  fearing 
that  the  industries  of  the  States  having  compulsory  mini- 
mum wage  laws  will  be  placed  at  any  very  serious  disad- 
vantage as  compared  with  the  industries  of  other  States. 


""Third  Report  of  the  New  York  State  Factory  Investigating  Com- 
mission, p.  243. 


126  A   LEGAL  MINIMUM   WAGE 

In  many  of  the  industries  which  will  be  or  are  already  af- 
fected by  minimum  wage  laws,  there  is  no  interstate  com- 
petition. The  laundries  and  mercantile  stores  are  good 
examples  of  this  class  of  industries.  Such  industries 
supply  a  local  demand  and,  therefore,  cannot  be  trans- 
ferred to  other  States.  If  the  cost  of  production  is  in- 
creased in  this  class  of  industries,  and  if  the  increased 
cost  is  not  compensated  for  by  increased  efficiency,  it  will 
be  reflected  at  least  to  some  extent,  in  increased  prices. 
It  is  not  probable  that  the  increased  cost  will  be  altogether 
reflected  in  increased  prices.  It  may  be  that  the  demand 
for  laundry  service  and  for  mercantile  store  service  will 
diminish,  if  prices  are  increased  too  much.  On  this  point, 
the  manager  of  the  Troy  Laundry  Company,  of  Portland, 
Ore.,  declared  in  a  recent  address  "that  should  the  price 
of  work  (laundry  work)  be  raised  the  work  would  be  done 
in  the  home.  Fuel,  water,  starch  and  soap  and  in  many 
cases  the  labor,  is  not  considered,  and  if  the  question  were 
asked  what  does  your  laundry  cost,  the  answer  would  be, 
'Nothing,  I  do  it  myself.'  "  What  is  true  of  laundries  in 
this  matter  may  perhaps  be  also  true  to  a  limited  extent 
of  mercantile  stores,  which  have  also  to  compete  with  the 
housewife. 

The  industries  that  do  not  cater  exclusively  to  a  local 
demand  have  to  engage  in  active  competition  with  the  in- 
dustries of  other  States.  Anything  that  increases  the  la- 
bor cost  in  these  industries  without  improving  the  quality 
of  the  article  produced  or  increasing  the  output  per  unit 
of  capital  and  labor,  will  place  them  at  a  disadvantage 
as  compared  with  the  same  industries  in  other  States  hav- 
ing a  lower  labor  cost.  From  the  English  and  Australian 
experience  and  even  from  the  short  experience  of  our 
own  States  with  minimum  wage  legislation,  we  are  justi- 
fied in  concluding  that  increased  labor  cost  will  be  met  by 
increased  efficiency  of  the  workers,  better  equipment  in 
factories  and  by  the  improved  quality  of  the  articles  pro- 
duced.    In  regard  to  the  English  experience,  the  Board 


SOME   OBJECTIONS   TO   LEGISLATION   CONSIDERED  127 

of  Trade,  in  the  letter  to  the  New  York  P^actory  Investi- 
gating Commission  already  referred  to,  declare  "the  fix- 
ing of  minimum  rates  has  resulted  in  better  organization 
among  the  employes  and  in  improvement  in  the  equip- 
ment and  organization  of  their  factories."  In  the  Ameri- 
can States  where  compulsory  minimum  wage  laws  are  in 
force,  employes  seem  to  be  making  up  for  increased  cost 
by  the  improved  quality  of  their  labor  supply.  In  Utah, 
according  to  the  Commissioner  of  Immigration,  Labor 
and  Statistics,  most  of  the  employers  admit  that  they  have 
obtained  increased  efficiency.  In  Oregon  there  seems  to 
be  a  disposition  according  to  the  secretary  of  the  com- 
mission, to  select  more  mature  women  for  the  more  skilled 
positions.  In  Washington,  the  secretary  of  the  commis- 
sion declares  that  the  employers  are  endeavoring  to  se- 
cure the  best  service  obtainable  for  the  wage  now  pre- 
scribed. It  seems,  therefore,  reasonable  to  conclude  from 
what  we  know  of  the  operation  of  minimum  wage  laws 
up  to  the  present  time,  that  employers  will  make  up  for 
the  increased  labor  cost  by  the  increased  efficiency  of  their 
labor  force,  improved  methods  of  production  and  a  better 
quality  of  goods."*  Minimum  wage  legislation  makes  it 
impossible  for  one  employer  to  reap  a  comj^etitive  ad- 
vantage over  other  employers  by  cutting  down  wages.  If 
an  employer  operating  under  a  minimum  wage  law  is  to 
obtain  a  competitive  advantage  over  other  employers,  it 
must  be  by  better  business  organization,  b}^  substituting 
mechanical  devices  for  labor,  or  by  a  superior  quality  of 
goods.  Minimum  wage  legislation,  therefore,  raises  the 
i:)lane  of  competition ;  it  substitutes  a  kind  of  competition 
that  develops  all  the  best  qualities  of  employers,  that 
develops  inventive  genius,  and  improves  the  talent  for 


'"^The  following  excerpt  from  a  statement  recently  given  out  by  the 
United  States  Bureau  of  Labor  Statistics,  is  of  interest  in  this  regard: 
"All  the  evidence  obtainable  from  American  States  which  have  put 
into  effect  the  legal  minimum  wage,  goes  to  confirm  the  experience 
of  the  Australian  States  where  the  prosperity  of  the  working  cless  has 
been  increased,  gross  'sweating'  abolished  and  general  business  con- 
ditions have  thriven."     (Washington  Herald,  March  24,  1915.) 


128  A    LEGAL  MINIMUM   WAGE 

business  organization  for  one  that  is  damaging  to  human  * 
life,  that  leaves  the  laborer  with  insufficient  wages  and 
frequently  reduces  him  to  a  condition  of  poverty  and  de- 
pendency.    So  far  as  minimum  wage  rulings  have  this 
effect,  no  State  has  any  reason  to  fear  that  a  minimum 
wage  law  will  place  an  undue  restriction  on  its  industries 
or  that  it  will  cause  any  of  them  to  be  transferred  to  other 
States  with  less  restrictions  and  a  cheaper  labor  supply. 
A  sixth  objection  against  minimum  wage  legislation 
is  that  it  will  force  employers  to  lower  the  wages  of  the 
more  efficient  workers  in  order  to  make  up  for  the  increase 
granted  to  the  less  efficient.    As  a  large  employer  of  Port- 
land put  it  in  a  letter  to  the  writer,  "We  have  a  great 
many  girls  that  greatly  exceed  the  minimum  wage  and 
this  is  the  kind  of  help  we  want,  but  the  minimum  wage 
does  not  help  these  girls  and  no  doubt  the  employers  as  a 
whole,  would  be  compelled  to  reduce  the  wage  of  the  more 
efficient  help  to  offset  the  difference  caused  by  the  ineffi- 
cient, should  the  ruling  of  the  welfare  commission  be  up- 
held."   Another  Portland  employer  writes  in  the  same 
vein :  "It  (the  minimum  wage  law)  has  created  a  tendency 
to  reduce  the  earning  power  of  the  energetic  and  efficient. 
Their  ability  and  efficiency  do  not  receive  the  same  recog- 
nition." What  seemed  to  the  writer  most  singular  in  re- 
gard to  the  replies  received  from  Portland  employers  on 
this  question  was,  that  while  they  were  very  eloquent  in 
speaking  about  tendencies,  not  one  of  whom  cited  any 
actual  cases  in  which  wages  had  been  lowered  as  a  result 
of  the  rulings  of  the  Oregon  Industrial  Welfare  Commis- 
sion.   It  may  be  that  the  actual  cases  in  which  wages  had 
been  lowered  were  so  few  as  to  give  only  a  very  slender 
support  of  the  alleged  tendency.     The  secretary  of  the 
Oregon   Industrial   Welfare    Commission  says  that  she 
knows  of  only  one  better-paid  worker  whose  wage  was 
reduced  as  a  result  of  the  minimum  wage  ruling.    On  this 
same  point,  the  secretary  of  the  Washington  Industrial 
Welfare  Commission  writes  as  follows:  "Enemies  of  the 


SOME   OBJECTIONS   TO   LEGISLATION   CONSIDERED  129 

law  claimed  that  the  higher  paid  employes  would  suffer 
to  meet  the  advance  occasioned  by  the  increase  of  those 
more  poorly  paid,  yet  no  instances  of  that  character  have 
been  brought  to  the  attention  of  the  commission." 

A  seventh  objection  to  minimum  wage  legislation  is 
that  it  will  increase  the  prices  which  the  workers  must  pay 
for  their  goods,  thus  taking  away  from  them  with  one 
hand  what  it  gave  them  with  the  other.  This  objection 
will  be  true  only  in  so  far  as  the  economics  of  production 
remain  the  same  and  even  then  it  will  be  only  partially 
true.  If  emploj^es  do  not  show  increased  efficiency  and  if 
the  employers  do  not  improve  their  business  methods, 
the  increased  labor  cost  will  have  to  be  met  by  increased 
prices.  But  from  the  experience  of  England  and  Aus- 
tralia, as  well  as  from  the  experience  of  American  States 
with  compulsory  minimum  wage  laws,  we  are  not  at  all 
justified  in  concluding  that  the  economies  of  production 
will  remain  the  same  at  least  in  most  industries,  after  a 
compulsory  minimum  wage  law  goes  into  effect.  On  the 
contrary,  we  have  every  reason  for  believing  that  em- 
ployers will  make  up  for  the  increased  labor  cost  by  de- 
manding more  work  from  their  employes,  by  a  more  care- 
ful selection  of  their  labor  force,  by  the  substitution  of 
mechanical  appliances  for  labor,  and  by  a  superior  qual- 
ity of  product.  But  even  though  prices  are  increased  in 
exact  proportion  to  the  increased  labor  cost,  this  increase 
of  prices  will  be  felt  by  all  purchasers  of  the  articles  pro- 
duced as  well  as  by  the  laborers.  The  laborers  will  only 
have  to  bear  one  portion  of  the  increase.  The  increased 
prices  which  the  laborers  will  have  to  pay  for  the  articles 
which  they  consume,  will  not  at  all  be  proportioned  to  the 
increase  of  wages  granted  to  them  under  the  minimum 
wage  law. 

The  community  cannot  very  well  object  to  the  pay- 
ment of  higher  prices,  if  higher  prices  are  necessary  in 
order  that  its  workers  may  be  paid  living  wages.  The 
community  must  pay  sufficient  interest  on  capital  that  is 


130  A    LEGAL   MINIMUM    WAGE 

engaged  in  producing  utilities  for  its  benefit,  otherwise 
capital  will  not  continue  producing  these  utilities ;  it  will 
be  allowed  to  lie  idle  in  bank  vaults,  or  will  be  changed 
into  consumers'  goods  by  its  owners.  Why,  then,  should 
the  community  enjoy  the  utilities  that  are  produced  by 
labor  without  paying  sufficient  wages  to  the  laborer  1  But 
the  opponents  of  minimum  wage  legislation  further  con- 
tend that  it  will  cause  a  f alling-off  of  the  demand  for  con- 
sumers'  goods,  they  contend  that  there  are  many  per- 
sons buying  these  goods  at  the  present  time  who  would  not 
be  willing  to  pay  higher  prices  for  them.  This  in  turn,  it 
is  asserted,  would  bring  a  decrease  in  production  and 
would  thereby  cause  a  slack  in  the  demand  for  labor.  The 
truth  of  the  foregoing  contention  will  depend  to  a  consid- 
erable extent  on  how  much  prices  are  increased  by  mini- 
mum wage  rulings.  If  there  is  only  a  slight  increase,  its 
effect  on  the  demand  for  the  things  that  we  look  upon  as 
''necessaries"  will  be  scarcely  appreciable.  It  may  in- 
crease the  price  of  some  of  these  things  but  the  increase 
of  price  ought  to  be  more  than  offset  by  the  increased  pur- 
chasing power  of  the  persons  whose  wages  have  been 
increased.  The  increased  price  may  cause  a  slackening 
in  the  demand  for  certain  articles  which  are  commonly 
looked  upon  as  superfluities.  But  it  is  quite  probable 
that  decrease  in  the  demand  for  superfluities  may  be 
offset  by  the  increased  demand  for  necessaries  brought 
about  by  the  increased  purchasing  power  of  those  affected 
by  minimum  wages  legislation. 


CHAPTER  XIV. 

AMERICAN  ECONOMISTS  AND  MINIMUM  WAGE 
LEGISLATION. 

It  is  sometimes  asserted  that  the  economists  are  op- 
posed to  minimum  wage  legislation.  In  order  to  find  out 
whether  or  not  there  was  any  real  basis  for  this  charge 
the  writer  recently  made  a  canvass  of  the  opinions  of  a 
number  of  American  economists  on  the  subject.  As  a 
result  of  this  canvass,  it  was  discovered  that  the  attitude 
of  the  economists  toward  minimum  wage  legislation  was 
by  no  means  reactionary.  Of  course,  the  economists,  do 
not  expect  such  marvellous  results  to  follow  from  mini- 
mum wage  legislation  as  do  some  of  its  enthusiastic  ad- 
vocates, nor  do  they  show  the  same  unreasoned  opposi- 
tion towards  it  as  the  ordinary  business  man  whose  inter- 
ests are  immediately  affected.  On  the  whole,  the  econo- 
mists believe  that  the  advantages  of  minimum  wage  leg- 
islation more  than  outweigh  any  difficulties  or  disadvant- 
ages which  it  may  entail. 

For  the  purpose  of  ascertaining  the  opinions  of  the 
economists,  the  writer  proposed  the  three  following  ques- 
tions to  them : 

(1)  Is  it  a  feasible  economic  policy  to  establish  a 
legal  minimum  wage  in  the  different  States,  (a)  for  women 
and  minors,  (h)  for  unorganized  workers  generally,  this 
legal  minimum  being  at  least  sufficient  to  maintain  the 
workers  in  health  and  efficiency"? 

(2)  Will  such  legislation  improve  methods  of 
production? 

(3)  Will  it  improve  the  average  efficiency  of  the 
workers? 

These  questions  were  sent  out  to  160  American  econo- 
mists, and  from  these  the  writer  received  ninety-four 
replies.    These  replies  varied  everywhere  between  a  sim- 

131 


132  A   LEGAL  MINIMUM   WAGE 

plQ_negative  or  affirmative  and  a  detailed  discussion  of 
minimum  wage  legislation.  Put  together  in  proper  form, 
they  would  make  an  exhaustive  treatise  of  minimum  wage 
legislation  from  the  viewpoint  of  economic  theory. 

Out  of  the  ninety-four  economists  replying  to  the  first 
part  of  the  first  question — is  it  a  feasible  economic  policy 
to  establish  a  legal  minimum  wage  in  the  different  States 
for  women  and  minors  I —  seventy  answered  in  the  affirm- 
ative, thirteen  in  the  negative,  and  eleven  declared  that 
they  were  either  in  doubt  or  that  the  question  was  so  in- 
volved as  to  preclude  a  categorical  reply.  It  may  be 
said,  therefore,  if  the  opinions  of  those  replying  to  our 
questions  can  be  taken  as  typical,  that  an  overwhelming 
majority  of  American  economists  are  in  favor  of  mini- 
mum wage  legislation  for  women  and  minors.  They  real- 
ize the  difficulties  of  such  legislation  but  they  feel  that 
they  are  well  worth  encountering  for  the  sake  of  the  great 
advantages  to  be  gained  in  the  health  and  efficiency  of  the 
workers.  As  one  economist  of  note  put  it,  "The  im- 
portance of  health  and  efficiency  in  the  case  of  women  and 
minors  is  so  great  that  from  my  point  of  view,  it  is  worth 
some  risk  and  sacrifices  to  secure  them."  The  majority 
of  those  who  set  themselves  down  as  favoring  a  minimum 
wage  for  women  and  minors  believe  that  it  should  be 
secured  by  a  gradual  and  slow  process.  They  believe 
that  the  minimum  should  be  rather  low  at  first  and  that  it 
might  be  afterwards  gradually  increased  as  industry  had 
sufficient  time  to  adjust  itself  to  the  change.  They  were 
convinced  that  in  this  way  the  difficulties  and  pitfalls  of 
minimum  wage  legislation  could  be  either  avoided  alto- 
gether or  considerably  lessened. 

In  regard  to  the  second  part  of  the  first  question — is  it 
a  feasible  economic  policy  to  establish  a  legal  minimum 
wage  in  the  different  States  for  unorganized  workers 
generally? — the  economists  are  not  so  sanguine.  Fifty- 
five  out  of  ninety-four  economists  declared  themselves 
in   favor   of   a  legal  minimum  wage   for   men,   twenty 


AMERICAN   ECONOMISTS  133 

declared  against  and  the  remaining  nineteen  declared  that 
they  had  not  given  the  matter  sufficient  thought  or  were 
still  so  much  in  doubt  about  it  that  they  could  not  venture 
an  opinion  especially  in  a  brief  categorical  form.  Al- 
though the  majority  of  those  replying  favor  minimum 
wage  legislation  for  men,  the  number  of  those  who  favor 
the  immediate  adoption  of  such  legislation  is  very  small. 
Most  of  those  who  favor  a  legal  minimum  for  men  think 
that  we  should  wait  until  the  experiment  shall  have  been 
tried  out  and  proved  to  be  workable  in  the  case  of  women 
and  minors.  A  minimum  wage  for  men  was  to  be  se- 
cured, as  one  economist  put  it,  by  the  "step-up  method." 
xA.t  first  minimum  wage  legislation  should  be  confined  to 
women  and  minors  but  might  be  afterwards  gradually 
extended  to  men,  beginning  with  those  lowest  down  in  the 
economic  scale  among  whom  there  was  the  least  liope  of 
organization.  Most  of  the  economists  were  in  agreement 
that  the  minimum  wage  fixed  for  men  should  be  very  low 
in  the  beginning.  They  were  afraid  that  the  adoption  of 
a  high  minimum  at  the  start,  might  overaccentuate  the 
difficulties  of  minimum  wage  legislation.  They  thought 
that  the  minimum  might  be  afterwards  gradually  in- 
creased as  in  the  case  of  women  and  minors,  as  industry 
had  adjusted  itself  to  the  first  increase. 

Of  the  economists  replying  to  the  second  question — 
will  such  legislation  improve  methods  of  production? — 
sixty-nine  thought  that  minimum  wage  legislation  would 
give  a  considerable  incentive  to  improvement  in  methods 
of  production,  eleven  thought  that  it  would  have  the  con- 
trary effect  and  fourteen  were  doubtful.  Those  who  con- 
sidered that  minimum  wage  legislation  would  give  an  in- 
centive to  improvement  in  methods  of  production  based 
their  argument  on  the  contention  that  the  hours  legisla- 
tion and  legislation  in  regard  to  working  conditions  have 
had  this  effect  in  the  past.  They  contended  that  every 
force  whether  natural  or  artificial,  which  increases  labor 


134  A    LEGAL   MINIMUM    WAGE 

cost  or  for  that  matter  any  other  cost  element  in  produc- 
tion, tends  to  improve  methods  of  production. 

Sixty-nine  economists  who  replied  to  the  third  ques- 
tion— will  it  (minimum  wage  legislation)  improve  the 
average  efficiency  of  the  workers? — thought  that  mini- 
mum wage  legislation  would  have  such  an  effect,  eleven 
thought  it  would  have  the  opposite  etfect,  while  fourteen 
were  doubtful  or  unwilling  to  make  a  categorical  reply. 
A  number  of  those  who  replied  in  the  affirmative  to  this 
question,  thought  that  the  effects  of  minimum  wage  legis- 
lation on  the  efficiency  of  the  workers  would  be  of  a  purely 
negative  character.  The  average  efficiency  will  be  slightly 
increased  by  the  weeding  out  of  the  less  efficient  which  will 
follow  the  enforcement  of  a  minimum  wage  law,  was  a 
common  expression  among  this  class  of  economists.  A 
large  percentage  of  the  economists,  however,  were  willing 
to  go  further  and  maintain  that  minimum  wage  legisla- 
tion would  exercise  a  positive  influence  on  the  efficiency 
of  the  workers.  In  the  first  place,  it  was  alleged  that  the 
workers  near  the  margin  of  competency  would  have  to 
work  harder  in  order  to  retain  their  positions.  Secondly, 
employers  would  be  compelled  to  demand  more  work  in 
order  to  make  up  for  the  increase  in  wages.  Thirdly, 
more  nourishing  food,  warmer  clothing  and  better  hous- 
ing afforded  to  the  workers  by  a  minimum  wage,  will  un- 
doubtedly increased  their  efficiency.  A  number  of  econo- 
mists while  admitting  that  minimum  wage  legislation 
would  increase  the  efficiency  of  the  workers  near  the  mar- 
gin of  competency,  thought  that  this  would  not  compensate 
for  the  decrease  in  the  efficiency  of  the  better-paid  workers. 
These  economists  thought  that  employers  in  order  to  re- 
coup themselves  for  the  increase  of  wages  granted  to  the 
less  efficient  workers,  would  lower  the  wages  of  the  more 
efficient,  thus  depriving  them  of  the  greatest  incentive  to 
efficiency. 

Three  economists  out  of  the  whole  number  whose 
opinions  were  canvassed,  declared  themselves  in  favor  of 


AMERICAN   ECONOMISTS  135 

Federal  minimum  wage  legislation.  They  contended  that 
the  passing  of  a  minimum  wage  law  hj  any  State  or  num- 
ber of  States  would  place  them  at  a  disadvantage  as  com- 
pared with  the  other  States,  and  it  was  accordingly  quite 
possible  that  the  State  passing  this  advanced  social  legis- 
lation might  have  to  sacrifice  some  of  its  industries.  Some 
of  its  industries  might  be  transferred  to  States  with  a 
cheaper  labor  supply. 

The  opinions  on  minimum  wage  legislation  which  we 
have  classified  above  are,  probably,  typical  of  the  opinions 
of  American  economists.  As  was  noted  above,  the  ma- 
jority of  them  declared  in  favor  of  minimum  wage  legis- 
lation for  women  and  minors. 

Before  concluding  tliis  section,  it  may  be  well  to  sum 
up  the  advantages  and  difficulties  of  minimum  wage  leg- 
islation as  they  appear  to  the  economists.  Putting  to- 
gether the  advantages  emphasized  by  one  or  other  of  the 
economists  favorable  to  the  legislation,  we  have  a  number 
of  viewpoints  which  will  help  us  to  appraise  the  beneficial 
effects  expected  to  result  from  minimum  wage  legisla- 
tion. Many  economists  thought  that  a  legal  minimum 
wage  would  increase  the  efficiency  of  the  workers  by 
enabling  them  to  have  better  medical  care,  warmer  cloth- 
ing and  more  nourishing  food,  and  by  compelling  society 
to  provide  a  more  practical  system  of  industrial  training. 
A  number  of  economists,  also  emphasized  the  influence  for 
better  which  the  common  method  of  securing  a  minimum 
wage  through  the  medium  of  wage  boards  would  have  on 
the  mental  caliber  of  the  workers.  Under  a  wage  board 
system  representatives  of  the  workers  would  meet  with 
those  of  employers.  Here  the  representatives  of  the 
the  workers  must  be  able  to  formulate  the  demands  of 
the  workers  and  they  must  be  able  to  give  reasons 
why  these  demands  should  be  granted.  Moreover, 
the  demands  presented  on  behalf  of  the  workers,  by 
their  representatives,  must  give  expression  to  their 
common-  wants  and  desires.     This  must  have  a  great 


136  A   LEGAL  MINIMUM   WAGE 

educational  value  for  the  workers,  it  must  compel 
them  to  study  their  own  problems  more  thoroughly 
and  learn  more  about  the  industries  in  which  they 
are  employed.  Minimum  wage  legislation,  a  number  of 
the  economists  thought,  would  prevent  employers  from 
taking  advantage  of  the  immobility  of  labor  and  the  rela- 
tively weak  bargaining  power  of  their  employes  to  pay 
them  less  than  the  necessary  cost  of  living.  By  a  mini- 
mum wage  ruling,  it  was  thought  that  the  employers 
would  be  compelled  to  pay  more  for  their  labor  with  the 
result  that  a  number  of  the  less  efficient  of  them  would 
be  put  out  of  business  while  the  efficiency  of  the  remain- 
der would  be  increased. 

All  the  economists,  even  the  strongest  advocates  of 
minimum  wage  legislation,  admit  that  it  is  beset  with 
some  real  difficulties.  The  more  important  of  these  diffi- 
culties, as  brought  out  by  the  different  economists,  may 
be  summarized  under  four  heads.  In  the  first  place, 
there  were  the  political  difficulties  due  to  the  opposition 
of  the  large  interests  and  of  organized  labor.  The  op- 
position of  organized  labor,  it  was  noted,  would  make 
itself  especially  felt,  if  there  was  a  question  of  adopting 
minimum  wage  legislation  for  men.  In  the  second  place 
a  number  of  difficulties  would  be  created  by  those  unable 
to  earn  the  prescribed  minimum  and  who,  accordingly, 
would  be  relegated  to  the  ranks  of  the  unemployed  and 
unemployable.  The  difficulties  created  by  those  who  could 
not  find  employment  at  the  minimum  would,  it  was 
claimed,  became  all  the  more  serious  if  the  minimum  was 
fixed  at  a  high  point  for  then  the  number  of  workers  dis- 
placed would  be  large.  There  was,  also,  the  danger  that 
the  number  of  the  unemployed  would  be  still  further  in- 
creased if  the  higher  wages  should  attract  d  better  class 
of  workers  to  the  trade.  In  the  third  place,  most  of  the 
economists  refer  to  the  constitutional  difficulties  in  the 
way  of  minimum  wage  legislation.  These  difficulties,  it 
was  contended,  would  be  greater  in  the  case  of  men  than 


AMERICAN   ECONOMISTS  137 

of  women  and  minors.  In  the  fourth  place,  it  was  feared 
lest  minimum  wage  legislation  might  impair  the  effi- 
ciency of  the  better-paid  workers.  Employers,  it  was 
thought,  would  be  inclined  to  lower  the  wages  of  the  more 
efficient  workers  in  order  to  make  up  for  the  increase 
granted  to  the  less  efficient.  One  strong  advocate  of  mini- 
mum wage  legislation  thought  that  this  would  be  a  real 
danger  in  the  beginning,  but  that,  after  a  time,  it  would 
become  less  apparent.  Employers  would  realize  that,  in 
order  to  have  really  efficient  workers,  they  should  pay 
them  more  than  the  minimum. 


BIBLIOGRAPHY 

BIBLIOGRAPHIES 

New  York  (City)  Public  Library.     The  Minimum  Wage  a  Preliminary  List  of 

Selected  References,  1913.     9  p. 
New  York  State  Factory  Investigating  Commission.     Third  Report,  Albany, 

1915,   pp.   387-413.     A   List  of  Selected  References  on  The   Minimum 

Wage  by  C.  C.  Williamson. 
Ohio  Industrial  Commission.     Department  of  Investigation  and  Statistics. 

Report  No.  1,  1914,  pp.  23-33.     Bibliography  on  The  Minimum  Wage 

by  C.  W.  Reeder. 
Minimum  Wage  Legislation  in  The  United  States  and  Foreign  Countries. 

Bulletin  of  the  United  States  Bureau  of  Labor  Statistics.     Whole  Number 

167,   Washington,   1915,  pp.   321-328.     A  select  List  of  References  to 

Books  and  Periodicals  (in  English)  on  The  Minimum  Wage. 

BOOKS  AND  PAMPHLETS 

Andrews,  I.  O.,  Minimum    Wage    Legislation,    Albany,    1914.     (Reprinted 
from  Appendix  III,  3rd  Report  of  the  New  York  State 
Factory  Investigating  Commission.) 
AvES,  Ernest,  Report  to  the  Secretary  of  the  Home  Department  on  the 
Wages  Boards  and  Indistrial  Conciliation  and  Arbitration 
Acts  of  Australia  and  New  Zealand.     London,  1908. 
BoEHRiNGER,  RoBERT,  Die  Lohamter  in  Victoria.     Leipzig,  1911. 
Boyle,  James,  The  Minimum  Wage  and  Syndicalism.     Cincinnati,  1913. 
Brandeis,  L.  D.  and  Josephine  Goldmark.     In  the  supreme  court  of  the 
United    States,    October    term,    1914.     F.    C.    Stettler. 
plaintiff   v.    E.    V.    O'Hara   et   al,    defendants.     Supple- 
mentary brief  filed  on  behalf  of  the  defendants  in  error. 
New  York,  1915. 
Broda,  Radolphe,  La  fixation  legale  des  salaires.     Paris,  1912. 
Brown,  Rome.  G.,  Supreme  Court  of  the  United  States,  October  term,  1914. 
F.    C.   Stettler   vs.   E.    V.   O'Hara   et   al.     Brief   and 
Argument  for  Plaintiffs  in  Error.     Minneapolis,  1914. 
Clark,  V.  S.,  The  Labour  Movement  in  Australasia.     London,  1907. 
Great  Britain,  Memoranda  in   Reference   to   the   Working  of   the   Trade 
Boards  Act.     London,  1913. 
National  Anti-sweating  League,  Annual  Reports.     London, 
1907-1914. 
Minimum- Wage  Legislation   in  the  United   States   and   Foreign    Countries. 
Bulletin  of  the  United  States  Bureau  of  Labor  Statistics. 
Whole  Number  167.     Washington,  1915. 
Raynaud,  Barthelemy,  Vers  le  Salaire  Minimum.     Paris,  1913. 
Ryan,  John  A.,  A  Living  Wage:     Its  Ethical  and  Economic  Aspects.     New 

York,  1906. 
Tawney,  R.  H.,  Minimum  Rates  in  The  Chain  Making  Industry.     London, 
1914. 

138 


BIBLIOGRAPHY 


139 


PERIODICAL  REFERENCES 


Clark,  J.  B., 
Hammond,  M. 


HOLCOMBE,    A.    W. 


The  Minimum  Wage  (In  Atlantic  Monthly,  Sept.,  1913). 
B.,  Wages  Boards  in  Australia  (Quarterly  Journal  of  Econo- 
mics.    Nov.,  1914,  and  Feb.,  1915). 
Judicial  Interpretation  of  the  Minimum  Wage  in  Australia 

(American  Economic  Review,  June,  1913). 
British  Minimum  Wages  Act  of  1909  (Quarterly  Journal 

of  Economics.     May,  1910). 
The   Legal    Minimum    Wage   in   the    U.    S.     (American 
Economic  Review,  March,  1912.) 
Kelly,  Florence,   Minimum     Wage     Boards.     In     American     Journal     of 

Sociology,  Nov.,  1911. 
MiLLis,  H.  A.,  Some  Aspects  of  the  Minimum  Wage.     (In  Journal  of  Political 

Economy,  February,  1914.) 

O'Hara,  E.  v..  The    Minimum    Wage,    Legislative    Aspects.     (In    Catholic 

University    Bulletin,    Washington,    1914,    vol.    XX,    pp. 

200-210.) 

Wage  Legislation  for  Women    (Catholic  World,  Jan.,  1915.) 

Women's  W'ork  and  Wages  in  the  United  States.     (Quarterly 

Journal  of  Economics,  February,  1915.) 
Minimum  Wage  Legislation.     (Catholic  World,  New  York, 

1913,  vol.  96,  pp.  577-586.) 

Minimum  Wage  Boards  in  Minnesota.     (Survey,  New  York, 

1914,  vol.  XXXIIL  No.  7.) 

Seager,  Henry  Rogers,  The  Theory  of  the  Minimum  Wage.     (American 

Labor  Legislation  Review,  New  York,  1913,  vol. 

3,  pp.  81-91.) 

Smith,  Constance,  Working  of  the  Trade  Boards  Act  in  Great  Britain  and 

Ireland.     (Journal  of  Political  Economy,  July,  1914.) 

Webb,  Sydney,  The  Economic  Theory  of  a  Legal  Minimum  Wage.     (Journal 

of  Political  Economy,  December,  1912.) 


Persons,  C.  E. 


Ryan,  John  A. 


BIOGRAPHY. 

The  author  of  this  dissertation  was  born  in  County 
Clare,  Ireland,  March  1,  1886.  After  passing  through  the 
local  schools  of  Killaloe  and  Limerick,  he  entered  All  Hal- 
lows College,  Dublin,  in  1902.  In  1909,  he  was  ordained  a 
priest  for  the  diocese  of  Omaha,  Nebr.  During  1910 
and  1911  he  was  associate  editor  of  the  Omaha  True 
Voice.  October,  1912,  he  entered  the  Catholic  University 
of  America  for  the  purpose  of  carrying  on  studies  in 
Economics  with  Dr.  O'Hara,  Sociology  with  Dr.  Kerby, 
and  Psychology  with  Dr.  Pace.  In  June,  1913,  he 
received  the  M.  A.  degree  in  course.  He  continued  his 
work  for  the  Doctor's  degree  under  the  same  Profes- 
sors, during  the  years  1913-1915.  In  addition  to  the 
courses  mentioned,  the  author  studied  History  of  Philos- 
ophy under  Dr.  Turner  and  Ethics  under  Dr.  Fox  in  the 
Catholic  University.  During  the  summer  quarters  of  1913 
and  1914,  he  pursued  courses  at  the  University  of  Chicago 
under  Dr.  Small,  the  late  Dr.  Henderson,  Dr.  Millis  and 
Dr.  Clark.  During  the  last  year  of  his  graduate  course  at 
the  Catholic  University,  the  author  was  enabled  through 
the  courtesy  of  Drs.  Hollander  and  Barnett,  of  Johns 
Hopkins  University,  to  attend  the  Economic  Seminar  con- 
ducted by  them. 

The  author  gladly  takes  occasion  to  thank  all  of  these 
very  cordially  for  direction,  helpful  criticism  and  friendly 
interest  throughout  the  entire  course  of  his  graduate 
studies. 


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